Question

ANSWER THE FOLLOWING QUESTIONS BY SHOWING ALL THE DETAILS OF CALCULATION.

The following financial statement information is known about five unrelated companies: Company Company Company Company Company A B C D E December 31, 2018: Assets... € 90,000 € 70,000 € 58,000 €160,000 € 246,000 Liabilities ... 47,000 45,000 28,000 76,000 December 31, 2019: Assets 96,000 82,000 ? 250,000 225,000 Liabilities ................ ? 55,000 38,000 128,000 150,000 During 2019: Owner investments............. 10,000 3,000 15,500 9,000 Net income............ 15,000 18,000 24,000 36,000 Owner withdrawals ...... 5,000 6,000 7,750 18,000 2 -0- Required 1. Answer the following questions about Company A: a) What was the owner's equity on December 31, 2018? b) What was the owner's equity on December 31, 2019? c) What was the amount of liabilities owed on December 31, 2019? 2. Answer the following questions about Company B: a) What was the owner's equity on December 31, 2018? b) What was the owner's equity on December 31, 2019? c) What was the net income for 2019? 3. Calculate the amount of assets owned by Company Con December 31, 2019. 4. Calculate the amount of owner investments in Company D made during 2019. 5. Calculate the amount of liabilities owed by Company E on December 31, 2018.

Answer 1

Answer -

1. a) Answer -

Owner's equity (2018) = Assets (2018) - Liabilities (2018)

Owner's equity (2018) = €90000 - €47000

Owner's equity on December 31, 2018 = €43000

1. b) Answer -

Owner's equity (2019) = Owner's equity (2018) + Owner investment + Net income - Owner withdrawals

Owner's equity (2019) = €43000 + 10000 + €15000 - €5000

Owner's equity on December 31, 2019 = €63000

1. c) Answer -

Liabilities (2019) = Assets (2019) - Owner's equity (2019)

Liabilities (2019) = €96000 - €63000

Liabilities on December 31, 2019 = €33000

2. a) Answer -

Owner's equity (2018) = Assets (2018) - Liabilities (2018)

Owner's equity (2018) = €70000 - €45000

Owner's equity on December 31, 2018 = €25000

2. b) Answer -

Owner's equity (2019) = Assets (2019) - Liabilities (2019)

Owner's equity (2019) = €82000 - €55000

Owner's equity on December 31, 2019 = €27000

2. c) Answer -

Net income for 2019 = Owner's equity (2019) + Owner withdrawals - Owner's equity (2018) - Owner investment

Net income for 2019 = €27000 + €6000 - €25000 - €3000

Net income for 2019 = €5000

3. Answer -

Owner's equity (2018) = Assets (2018) - Liabilities (2018)

Owner's equity (2018) = €58000 - €28000

Owner's equity on December 31, 2018 = €30000

Owner's equity (2019) = Owner's equity (2018) + Owner investment + Net income - Owner withdrawals

Owner's equity (2019) = €30000 + €15000 + €18000 - €7750

Owner's equity on December 31, 2019 = €55250

Assets (2019) = Liabilities (2019) + Owner's equity (2019)

Assets (2019) = €38000 + €55250

Assets on December 31, 2019 = €93250

4. Answer -

Owner's equity (2018) = Assets (2018) - Liabilities (2018)

Owner's equity (2018) = €160000 - €76000

Owner's equity on December 31, 2018 = €84000

Owner's equity (2019) = Assets (2019) - Liabilities (2019)

Owner's equity (2019) = €250000 - €128000

Owner's equity on December 31, 2019 = €122000

Owner investment during 2019 = Owner's equity (2019) + Owner withdrawals - Owner's equity (2018) - Net income

Owner investment during 2019 = €122000 + €0 - €84000 - €24000

Owner investment during 2019 = €14000

5. Answer -

Owner's equity (2019) = Assets (2019) - Liabilities (2019)

Owner's equity (2019) = €225000 - €150000

Owner's equity on December 31, 2019 = €75000

Owner's equity (2018) = Owner's equity (2019) + Owner withdrawals - Owner investment - Net income

Owner's equity (2018) = €75000 + €18000 - €9000 - €36000

Owner's equity on December 31, 2018 = €48000

Liabilities (2018) = Assets (2018) - Owner's equity (2018)

Liabilities (2018) = €246000 - €48000

Liabilities on December 31, 2018 = €198000