Complete the following assignments · Exercise 1-4 · Exercise 1-6 · Exercise 1-19a · Exercise 1-23a-d Exercise 1-4 Missing information in the accounting equation Calculate the missing amounts in the following table. Exercise 1-6 Effect of transactions on general ledger accounts At the beginning of 2014, Foster Corp.’s accounting records had the following general ledger accounts and balances. Foster Corp. completed the following transactions during 2014: 1. Purchased land for $20,000 cash. 2. Acquired $10,000 cash from the issue of common stock. 3. Received $90,000 cash for providing services to customers. 4. Paid cash operating expenses of $65,000. 5. Borrowed $20,000 cash from the bank. 6. Paid a $5,000 cash dividend to the stockholders. 7. Determined that the market value of the land purchased in event 1 is $30,000. Required a. Record the transactions in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. b. As of December 31, 2014, determine the total amount of assets, liabilities, and stockholder’s equity and present this information in the form of an accounting equation. c. What is the amount of total assets, liabilities, and stockholders’ equity as of January 1, 2015? Exercise 1-19 Preparing financial statements Carolina Company experienced the following events during 2014. 1. Acquired $50,000 cash from the issue of common stock. 2. Paid $15,000 cash to purchase land. 3. Borrowed $25,000 cash. 4. Provided services for $60,000 cash. 5. Paid $12,000 cash for rent expense. 6. Paid $22,000 cash for other operating expenses. 7. Paid a $5,000 cash dividend to the stockholders. 8. Determined that the market value of the land purchased in Event 2 is now $16,500. Required a. The January 1, 2014, general ledger account balances are shown in the following accounting equation. Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example. Exercise 1-23 Retained earnings and the closing process As of December 31, 2014, Blue Haven Company had total assets of $100,000, total liabilities of $30,000, and common stock of $50,000. The company’s 2014 income statement contained revenue of $16,000 and expenses of $11,000. The 2014 statement of changes in stockholder’s equity stated that $2,000 of dividends were paid to investors. Required a. Determine the before-closing balance in the Retained Earnings account on December 31, 2014. b. Determine the after-closing balance in the Retained Earnings account on December 31, 2014. c. Determine the before-closing balances in the Revenue, Expense, and Dividend accounts on December 31, 2014. d. Determine the after-closing balances in the Revenue, Expense, and Dividend accounts on December 31, 2014.

Sample Paper For Above instruction

The assignments presented require detailed accounting procedures, including journal entries, financial statement preparation, and closing processes. This paper will address each exercise sequentially, providing comprehensive explanations, calculations, and illustrative examples to demonstrate understanding of fundamental accounting principles.

Exercise 1-4: Missing Information in the Accounting Equation

This exercise involves determining missing amounts in a table representing assets, liabilities, and equity. To solve it, one must understand the fundamental accounting equation: Assets = Liabilities + Stockholders’ Equity. Given various transactions and balances, the goal is to identify unknown values by applying this equation repeatedly as transactions occur.

For example, if a company purchases land for $20,000 cash, the asset accounts increase—specifically, land increases by $20,000 while cash decreases by $20,000. Similar logic applies to other transactions like issuing stock, providing services, and paying expenses. Accurately recording these transactions in ledger accounts ensures the correctness of financial statements.

By analyzing each event and its impact on the accounting equation, we can compute missing amounts ensuring that the equation remains balanced after each transaction. This continuous balancing process is essential in maintaining accurate financial records.

Exercise 1-6: Effect of Transactions on General Ledger Accounts

In this exercise, we begin with initial balances of Foster Corp. and record a series of transactions for 2014. The transactions include purchasing land, issuing stock, providing services, paying expenses, borrowing funds, and paying dividends. Each of these affects various ledger accounts such as Cash, Land, Common Stock, Revenue, Expenses, and Dividends.

The process involves journalizing each transaction followed by posting to ledger accounts. For instance, the purchase of land involves debiting Land and crediting Cash. Providing services increases Cash and Revenue, while paying expenses decreases Cash and increases Expenses. Borrowing increases Cash and Liabilities.

At year-end, the total assets are calculated by summing all asset accounts; liabilities are determined from obligations like loans; stockholders’ equity is computed as the residual interest, including Common Stock and Retained Earnings. The accounting equation is then demonstrated as Assets = Liabilities + Stockholders’ Equity, reflecting the financial position of Foster Corp. on December 31, 2014.

To complete the exercise, journal entries for all transactions are recorded, ledger accounts are updated, and the balances are summarized. This helps in understanding how daily business transactions influence the company's financial position.

Exercise 1-19: Preparing Financial Statements

This exercise involves recording a set of events that change the company's accounting records and preparing financial statements accordingly. Starting with initial balances, each transaction impacts the ledger accounts, affecting assets such as cash and land, as well as revenues, expenses, and dividends.

For example, acquiring cash from issuing stock increases Cash and Stockholders’ Equity, while purchasing land affects Land assets. Providing services for cash results in increased Cash and Revenue. Expenses like rent and operating costs decrease Cash and reduce net income.

After recording all transactions, the company’s net income is calculated as Revenue minus Expenses. The dividends paid reduce retained earnings. These figures are used to prepare the income statement, statement of retained earnings, and balance sheet.

The importance of accurately recording each event is emphasized because it directly influences the financial statements, which are used by stakeholders to assess company performance and financial position.

Exercise 1-23: Retained Earnings and the Closing Process

This exercise focuses on the closing process at year-end to determine retained earnings. Given the balance sheet data and income statement figures, the steps include calculating the beginning and ending retained earnings, as well as summarizing the balances in revenue, expenses, and dividends before and after closing entries.

The beginning retained earnings for 2014 are adjusted by adding net income (Revenues minus Expenses) and subtracting dividends paid. This results in the ending retained earnings, which appear on the classified balance sheet.

The closing process involves transferring revenue and expense balances to Retained Earnings, thereby resetting temporary accounts to zero for the new fiscal year. Accurately performing this process ensures correct reflection of retained earnings in subsequent periods.

These procedures encapsulate the core of closing entries in accounting, ensuring the accuracy and integrity of financial reporting across fiscal periods.

Conclusion

In sum, these exercises emphasize the practical application of accounting principles, including recording transactions, understanding the impact on the accounting equation, preparing financial statements, and accurately closing temporary accounts. Mastery of these fundamental tasks is essential for credible financial reporting and business analysis.

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