Question

BRILP EAERLISE 2.) Computing Change in Cash U umng the current year: • Earned revenues of $100.000 and incurred expenses of $56,000, all in cash. Purchased a truck for $25,000. Sold land for $10,000 • Borrowed $15.000 from a local bank. What was the total change in cash during the year? LO2-8 BRIEF EXERCISE 2.8 Alternative Forms of Equity Solway Company is a sole proprietorship whose owner, Joe Solway, has an equity interest of $50,000. Had Solway been a partnership rather than a sole proprietorship, and the two equal part- ners were Joe and his brother Tom, how would the $50,000 owners' cquity be presented in the company's balance sheet? LO2-8 BRIEF EXERCISE 2.9 Alternative Forms of Equity Repeat Brief Exercise 2.8, except assume that rather than being a sole proprietorship or a partner ship. Solway Company is organized as a corporation with capital stock of $48.000. How would the $60,000 of owners' equity be presented in the company's balance sheet? LO2-7 BRIEF EXERCISE 2.10 Articulation of Financial Statements Ben Washington, sole owner of Washington Mattress Company, has an ownership interest in the company of $50,000 at January 1, current year. During that year, he invests an additional $20,000 in the company and the company reports a net income of $25,000. Determine the balance of owner's equity that will appear in the statement of financial position at the end of the year, and explain how the amount of net income articulates with that figure in the balance sheet. Exercises a connect LO2-3 EXERCISE 2.1 The Nature of Assets and Liabilities Assets and liabilities are important elements of a company's financial position. 1. Define assers. Give three examples of assets other than cash that might appear in the balance sheet of (1) American Airlines and (2) a professional sports team, such as the Boston Red Sox. 2. Define liabilities. Give three examples of liabilities that might appear in the balance sheet of (1) American Airlines and (2) a professional sports team, such as the Boston Red Sox.
need exercise 2.1 answered numbers 1 and 2 thanks

Answer 1

1. ASSET-   An asset is a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide a future benefit . An asset can be thought of as something that, in the future, can generate cash flow, reduce expenses or improve sales, regardless of whether it's manufacturing equipment or a patent. Assets are reported on a company's balance sheet and are bought or created to increase a firm's value or benefit the firm's operations.

EXAMPLES: Assets that might appear are as follows -

AMERICAN AIRLINES - Receivables, Inventory of food , Investments , Property plant and equipment (planes), Goodwill

BOSTON RED SOX - Ticket sales, Stadium owned by co, Receivables, Contracts with players

2. LIABILITY - A company's liabilities are obligations that are either

(1) legal or

(2) constructive (i.e. expected)

in which the company will need to settle with cash, other assets or exchange assets in unfavorable conditions. A company's Liabilities are presented in the financial statements under the balance sheet report. Their section is presented between the Assets and Shareholder Equity sections and is separated into current and non-current subsections.

EXAMPLES : Liability that may appear are as follows -

AMERICAN AIRLINES - Accounts payable , Income tax payable , Debts along with their interest

BOSTON RED SOX - Employee salaries , Unearned revenue on advance sales, Lawsuit provision