Week 1 Assignment-ACC557
Please complete Chapter 1 BYP1-4 and submit to the Dropbox.
a) The loss of $6,100 was based on the difference between the amount invested of $25,000 and the bank balance of $18,900 at March 31. This is not valid for determining income because it only shows the change in cash between to points in time.
b) Using the balance sheet to conclude the net income is not valid because there is no net income on the balance sheet. You get the net income from the income statement and it goes on the balance sheet when you close the books for the year. Then it moves to the retained earnings segment in the balance sheet. At March 31 the balance sheet does not include the net income, thus far.
The balance sheet at March 31 is as follows:
Chip-Shot Driving Range Company
Accounts Payable $(850)
Total Current Assets 23,800 Total Liabilities 150 Investments
Property, Plant & Equipment
Prop,Plant & Equip-net 8,800
9650 Total Assets
Total Liab. & Stockholders Equity $34,800
c) The Grays actual net income for March is:
Net income = $ 25,000 + 18,900 +(1,000 -8,000 - 800 - 1,000 - 750 -400 -100)
= $ 43,900 – 10,050 = $ 33,850
d) The revenue earned in March was $8,850. ($18,900 - $10,050)
Total revenue earned from customers – total expenses for March.
Liabilities Stockholders’ Equity Cash Supplies Equipment Accounts Common Earned...
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