Question

1. Compute the missing amount in the accounting equation for each entity from the financial information presented: Assets Liabilities 40,000 $ Nice Cuts $ Equity 31,000 42,000 Love Drycleaners Holly Maids 90,000 111,000 47,000 2. Star Nursery started 2018 with total assets of S14,000 and total liabilities of $9,000. At the end of 2018, Star Nursery's total assets stood at $19,000 and total liabilities were $11,000. Requirements 1. Did the stockholders' equity of Star Nursery increase or decrease during 2018? By how much? 2. Identify the four possible reasons that stockholders' equity can change. Requirement 1. Did the stockholders' equity of Star Nursery increase or decrease during 2018? By how much? The stockholders' equity (1) during the year by $ . Requirement 2. Identify the four possible reasons that stockholders' equity can change Stockholders' equity can increase through: (2) - and/or (3) - Stockholders' equity can decrease through (4) – andior (5) (1) O O increased O decreased O O (2) Oborrowing money O dividend payment issuance of common stock O net loss paying a liability purchasing assets for cash purchasing assets on account O O (3) O borrowing money O dividend payment O net income Onet loss paying a liability purchasing assets for cash purchasing assets on account (4) O borrowing money O dividend payment O issuance of common stock O net income O paying a liability O purchasing assets for cash O purchasing assets on account O (5) O borrowing money issuance of common stock O net income net loss paying a liability purchasing assets for cash purchasing assets on account O

Answer 1

Accounting Equity	Assets = Liabilities + Equity
	Assets	Liabilities	Equity
Nice Cuts	71,000	40,000	31,000
Love DryCleaners	90,000	48,000	42,000
Holly Maids	111,000	47,000	64,000
2. Equity in the beginning	5,000
Equity at end	8,000
Increase in Equity	3,000
Increased during the year by $3000
2.Increase through Issuance of stock and or/Net Income. Decrease through dividend payment and net loss

1 Accounting Equity 2 3 Nice Cuts 4. Love Dry Cleaners 5 Holly Maids 6 7 2. Equity in the beginning 8 Equity at end 9 Increase in Equity В Assets = Liabilities + E Assets Liabilities =C3+D3 40000 90000 =B4-D4 111000 47000 Equity 31000 42000 =B5-C5 =14000-9000 =19000-11000 =B8-B7 10 11 Increased during the year by $3000