Chapter 1 - Assignment 1

Problem 1-1

Required: Indicate whether each of the following is an asset (A),liability (L), or owners equity (E) item.

AssetsLiability

Equity

Capital, Rev, Exp, Drawings

Accounts payable

Accounts receivable

Note Payable

Cash

EquipmentInsurance expense

Taxes payable

Prepaid insurance

Rent expense

Repair revenue

Owner capital

Gas expense

office supplies

Drawing

Problem 1-2

Required: Calculate the missing amounts for companies A to E based on the accounting equation: Assets = Liability + Owners Equity.

ABCDECash$3,000$1,000$ ?$6,000$2,500Equipment8,0006,0004,0007,000?Account Payable4,000?1,5003,0004,500Owners Capital?4,0003,500?1,500

Problem 1-3

A junior bookkeeper of Adams Ltd. prepared the following incorrect financial statements at January 31, 2022, the end of its first month of operations.

Adams Ltd.

Income Statement

For the Month Ended January 31, 2022

Revenue

Expenses

Accounts payable

Land

Drawing

Miscellaneous expenses

$ 300

1,000

500

335

$3,335

Net income$1,200

Balance Sheet

Assets

Liabilities and Owners Equity

Cash

Repairs expense

Salaries expense

Building

$1,200

500

1,000

3,000

Rent expense

Owners capital

$ 300

4,200

$4,500$4,500

Required:Prepare a revised income statement, a statement of Owners equity, and a balance sheet. (Type your work).