Question

To purchase office supplies. analysis of the first eight transactions of Advanced Accounting Service follows. Describe each transaction. LIABILITIES + Cash ASSETS + Accounts Receivable Equipment Accounts Payable + EQUITY Wel + Service - Salaries Withdrawals Revenue Expense 1 Wel, Capital +31,000 +31,000 +3,800 Bal. $31,000 + $3,800 $31,000 +3,800 $3,800 +13,400 + $13,400 +12,400 513,400 $13,400 + $3,800 + 331,000 + $31,000 + $13.400 + $3,800 + 513,610 Bal. $31,000 + $3,800 4 +190 -190 Bal. 531,190 + $3,610 5 410 Bal. 530,780 + $3,610 6 -8,000 Bal. $22,780 + 53,610 7 +790 Bal. $23,570 + $3,610 8 -1,500 Bal. 322,070 + 33,610 – 331,000 + 53,800 $13,400 -8.000 $5,400 + $13,810 + $31,000 + + 513,810 55,400 + 531,000 + $3,800 +790 $4.590 - 1.500 $4,590 - $1,500 + $13,810 35.400 + 531,000 + 8. Eager Beaver, Inc., started 2011 with total assets of $24,000 and total liabilities of $11,000. At the end of 2011, the business's total assets stood at $34,000 and its total liabilities were $17,000. Requirements: R1. Did the stockholders' equity of Eager Beaver increase or decrease during 2011? By how much? R2. Identify two possible reasons for the change in the stockholders' equity during the year. 9. The 2011 annual report of Priority Parcel Service (PPS) reported revenue of $28 billion. Total expenses for the year were $21 billion. PPS ended the year with total assets of $37 billion, and it owed debts totaling $17 billion. At year-end 2010, the business reported total assets of $30 billion and total liabilities of $17 billion. a. Compute PPS's net income for 2011. b. Did PPS's stockholders' equity increase or decrease during 2011? By how much? C. How would you rate PPS's performance for 2011-good or bad? Give your reason. Accounting 1 Assignment 1.1 Handout 2017 Pearson Education 6/5/2017

Answer 1

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Answer 7
Advanced Accounting Service
1	Business started with cash of $ 31,000. That’s cash and capital is increased by $ 31,000.
2	Service of $ 3,800 provided on account. That’s why service revenue and accounts receivable is increased by $ 3,800.
3	Equipment of $ 13,400 purchased on account. That’s why equipment and accounts payable is increased by $ 13,400.
4	Received cash of $ 190 from accounts receivable. That’s why cash is increased by $ 190 and accounts receivable is decreased by $ 190.
5	Equipment of $ 410 purchased in cash. That’s why equipment is increased by $ 410 and cash account is decreased by $ 410.
6	Paid cash of $ 8,000 to accounts payable. That’s why cash is decreased by $ 8,000 and accounts payable is decreased by $ 8,000.
7	Service of $ 790 provided in cash. That’s why service revenue and cash is increased by $ 790.
8	Salaries of $ 1,500 paid in cash. That’s why salaries expense is increased by $ 1,500 and cash decreased by $ 1,500.
Answer 8	2011 beginning	2011 ending
Total Assets	24,000.00	34,000.00
Less: Total Liabilities	11,000.00	17,000.00
Stockholder's Equity	13,000.00	17,000.00
Increased by		4,000.00
Answer R1	Yes, Stockholder's Equity has increased during 2011 by $ 4,000.
Answer R2	The possible reasons are that company has earned income during the year or there is capital issue during the year.
Answer 9	$ Billion
Total Revenue	28.00
Less: Total Expense	21.00
Net income for 2011	7.00
Answer a	Net income for 2011 is $ 7.
	2010	2011
Total Assets	30.00	37.00
Less: Total Liabilities	17.00	17.00
Stockholder's Equity	13.00	20.00
Increased by		7.00
Answer b	Yes, Stockholder's Equity has increased during 2011 by $ 7 billion.
Answer c	PPS has earned net income of $ 7 billion in 2011. Its total liabilities are unchanged but total assets and equity has increased by $ 7 billion. So the performance of the company is very good in 2011.