Challenge Exercise 1-1

Expands on: E1-10

LO:5

The total assets and liabilities of Robot Company at January 1 and December 31, 2020 are presented below.

January 1 December 31

Assets $76,000 $112,000

Liabilities 26,000 28,800

Instructions:

1. Assume owner's drawings of $10,800 were paid and no additional investment was made during the year.Revenues were $110,000. Compute (a) net income, and (b) expenses.
2. Assume an additional investment was made for $4,800 and no drawings were paid during the year. Expenses were $42,000. Compute (a) net income, and (b) revenues.
3. Assume an additional investment was made for $62,000 and drawings of $15,600 were paid during the year. Compute net income.
4. Assume an additional investment was made for $6,000, and net income was $51,000. Compute the drawings paid.