Accounting Equation Exercises

by Kevin
(North Carolina, USA)

Q: Tom Jones is the owner and operator of Jones Enterprise, a motivational consulting business. At the end of its accounting period, December 31, 2009, Jones Enterprise has assets of $760,000 and liabilities of 240,000.


Use the accounting equation to calculate the answers in each of the following:

a) Tom Jones, capital, as of December 31, 2009

b) Tom Jones, capital, as of December 31, 2010, assuming that assets increased by $120,000 and liabilities increased by $72,000 during 2010

c) Tom Jones, capital, as of December 31, 2010, assuming that assets decreased by $60,000 and liabilities increased by $21,600 during 2010

d) Tom Jones, capital, as of December 31, 2010, assuming that assets increased by $100,000 and liabilities decreased by $38,400 during 2010

e) Net income during 2010, assuming that as of December 31, 2010, assets were $960,000, liabilities were $156,000, and there were no additional investments or withdrawals.


SOLUTIONS BELOW:





























ASSETS = OWNER'S EQUITY + LIABILITIES
December 31, 2009
$760,000
a) $520,000
$240,000
Changes during 2010
+ $120,000
+ $72,000
December 31, 2010
$880,000
b) $568,000
$312,000





























ASSETS = OWNER'S EQUITY + LIABILITIES
December 31, 2009
$760,000
$520,000
$240,000
Changes during 2010
- $60,000
+ $21,600
December 31, 2010
$700,000
c) $438,400
$261,600





























ASSETS = OWNER'S EQUITY + LIABILITIES
December 31, 2009
$760,000
$520,000
$240,000
Changes during 2010
+ $100,000
- $38,400
December 31, 2010
$860,000
d) $658,400
$201,600





























ASSETS = OWNER'S EQUITY + LIABILITIES
December 31, 2009
$760,000
$520,000
$240,000
Changes during 2010
(net income)
e) $284,000
December 31, 2010
$960,000
$804,000
$156,000



Hope you enjoyed these accounting equation exercises!


Comments for Accounting Equation Exercises

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Excellent
by: Ms Matlenya student at Richfield graduate

Am a first year student with no background knowledge on accounting but the exercises gave me an idea on the accounting basics, thank you!

edsd
by: thevine

this is easy to for reference but its not clearly mentioned as noticed

accounting equation
by: Anonymous

really enjoyed the equation.

WHOO
by: Anonymous

Whoo accounting is fun it like a game to me ...
it is fun......lol

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