Homework Answers
Part 1) Concept of Equity
Equity refers to the owners fund or capital invested in an entity. It refers to the amount left after deducting all liabilities from assets. As per Accounting Equation,
Assets = liabilities + equity, hence Equity =Assets - Liabilities
For corporations, it is termed as shareholders equity and for proprietorship, same is termed as owners equity.
Part 2)Identification of category
| Accounts Receivable | Current Assets |
| Barns | Non Current Assets |
| Bill owed to utility company | Current liabilities |
| Breeding Cattle | Non Current Assets |
| Cash | Current asset |
| Debt owed to bank for 30 year mortgage | Non Current liabilities |
| Feed Inventory | current Assets |
| Fences | Non Current Assets |
| Insurance paid in advance | Current Assets |
| Land | Non Current assets |
| Machinery | Non Current Assets |
| Shed | Non Current Assets |
| Tractors | Non Current Assets |
| Vehicles | Non Current assets |
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Identify the category on the balance sheet (current assets, non-current assets, current liabilities, non-current liabilities, equity) in which each of these items is located. Accounts Receivable Barns Bill owed to utility company Breeding Cattle Cash Debt owed to bank for 30 year mortgage on land Feed inventory Fences Insurance paid for in advance Land Machinery Shed Tractors Vehicles
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1-3 On which financial statement would you find the following financial state- ment categories? Assets Equity Expenses Gains Liabilities Losses Revenues 1-4 Calculate Net Income for each of the situations below. a. Revenues = $1,350,000; Expenses = $950,000. b. Revenues = $1,350,000; Expenses = $950,000; Gains $10,000 c Revenues = $1,350,000; Expenses = $950,000; Gains = $10,000; Losses = $5,000. d. Revenues = $1,350,000; Expenses = $950,000; Losses = $35,000 e. Revenues = $1,350,000; Expenses $1,450,000; Gains = $10,000 f....
Table 1: Records of JKJ Farm as of January 2017. Amount $ Items Vehicles Cash in the bank Land Current portion of term debt Accounts payable Depreciation on machinery Breeding stock Hay on hand Income tax payable Other accrued expenses Calves to be sold in 15 days Grain on hand Accounts receivable Real estate debt Prepaid expenses Notes payable on machinery (due in 6 years) Vehicles Buildings 7,000 60,000 400,000 57,000 123,000 3,700 131,000 19,000 16,800 19,700 48,000 40,000 40,000...
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Rhonda Rancher has applied for a loan. Her banker, Larry Loanmaker, says the old balance sheet on file must be brought up to date before a loan will be considered. Rhonda spends the rest of the aftermoon taking inventory and gathering other information. In a new spreadsheet file, create a current Market Basis balance sheet for Rhonda dated February 1, 2020. Do not use any pre made templates. I want you to create the balance sheet from scratch. Use the...
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