Accounting

Chapter 2

Recording Business Transactions

Excel Application Exercise

Solution

1. Total assets: $10,200

2. Total liabilities: $0

3. Total owner’s equity (includes net income as part of Brett Wilkinson, Capital): $10,200. You may wish to point out to students that the accounting equation must be in balance.

4. Net income: $1,200

( Quick Check

Answers:

|1. c |3. d |5. b |7. c | 9. a |

|2. a |4. c |6. b |8. d |10. a |

Explanations:

3. d. Owner’s equity is $130,000 ($50,000 + $60,000

+ $200,000 – $80,000 – $100,000).

7. c. Supplies balance is $1,200 ($500 + $700). The

payment of accounts payable does not affect supplies.

9. a. Ending equity is $90,000, computed as follows:

|Beginning owner’s equity…….. | |$ 50,000 |

|Add: Net income: | | |

| Revenues…………… |$110,000 | |

| Less: Expenses… | 30,000 | |

| Net income…………. | |80,000 |

| Additional investment.. | |20,000 |

|Less: Withdrawals…………… | | (60,000) |

|Ending owner’s equity………… | |$ 90,000 |

( Starters

(10 min.) S 2-1...