Essay About Shareholders’ Equitybeginning And Shareholders’ Equity

Accounting Study
Accounting Study
BRIEF EXERCISE 1-8 Beginning of Year: Assets = Liabilities + Shareholders’ equityBeginning of Year: $800,000 = $500,000 + Shareholders’ equityBeginning of Year: Shareholders’ equity = $300,000(a)        ($800,000 + $150,000) = ($500,000 – $80,000) + Shareholders’ equity        Shareholders’ equity = $530,000(b)        Assets = ($500,000 – $50,000) + ($300,000 + $50,000 + $75,000)         Assets = $875,000(c)        ($800,000 – $80,000) = Liabilities + ($300,000 + $110,000)        Liabilities = $310,000BRIEF EXERCISE 1-10(a)        A(b)        L(c)        A(d)        A(e)        SE(f)        L(g)        SE(h)        AEXERCISE 1-6[1]         Total revenues – Profit = Total expenses        $1,000,000 – $150,000 = $850,000Note that item [2] cannot be solved until item [3] or [4] has been determined.[2]        Beginning balance in shareholders equity + Issue of shares + Profit – Dividends = Ending balance in shareholders’ equity        $0 + $100,000 + $150,000 – Dividends = $200,000 (from [3])        Dividends = $50,000