Business Finance
BA220 Grantham Financial Accounting Calculation of Net Income Worksheet

BA220

Grantham University

Question Description

Exercise 2-15A on page 110

  • Exercise 2-19A on page 111
  • Exercise 2-27A on page 113
  • Exercise 2-29A on page 114
  • Exercise 2-30A on page 114
  • Final Answer

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    FINANCIAL ACCOUNTING ASSIGNMENT






    Exercise 2-15A on page 110
    Exercise 2-19A on page 111
    Exercise 2-27A on page 113
    Exercise 2-29A on page 114
    Exercise 2-30A on page 114

    ANSWERS

    No. 15A
    a. Calculation of used rent amount.
    -

    Prepaid rent = $18,000

    -

    Number of months completed is 11 months.

    -

    Used rent amount =

    No.of months completed 

     Prepaid rent 

    12months



    11months 

     $18000 
      $16,500 …………. equation I
    12months 


    Preparation of work sheet.
    “M” Industry
    effect of events on
    the Accounting
    Equation
    Event

    Assets

    =

    Liabilities

    + Stockholders’
    Equity

    Cash

    Prepaid
    expenses

    Performed services

    $36,000

    Prepaid rent

    ($18,000)

    Used rent (from
    equation I)

    =

    Retained
    earnings
    $36,000

    $18,000
    ($16,500)

    ($16,500)

    Total

    ($18,000)

    $1,500

    $19,500

    b. Calculation of net income
    “L” Industry income
    statement for the year
    ended December 31, 2016.
    Particulars

    Amount Amount

    Revenues recognized on

    $36,000

    account
    Less; expense

    $16,500

    Net income

    $19,500

    Preparation of “L” industry balance sheet
    “L” Industry
    Balance sheet
    As of December 31, 2016.
    Assets

    Amount

    cash

    $18,000

    Accounts receivable

    $1,500

    Total Assets

    Amount

    $19,500

    Liabilities
    $0
    Total liabilities

    $0

    Stockholders’ equity
    Retained earnings

    $19,500

    Total stockholders

    $19,500

    Total Liability and Stockholder...

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