Homework 2

Using the two basic accounting equation solve the following.

1- Isaac invests $24000 in his business.

How much is the value of each?

a. Assets = _____________________

b. Liabilities = 0

c. Owners Equity = _________________

2- He then buys a truck for $12000 and a plow for $1000, to start a snow plowing business. He pays $3000 cash and borrows the rest.

How much is the value of each?

a. Assets = (add 12000 and 1000 to assets then subtract 3000 cash)

b. Liabilities = ___________________

c. Owners Equity = _________________

3- He then pays $300 dollars for social media advertising. He gets several snow plowing jobs and earns $600. He pays $100 for the gas he uses.

How much is the value of each?

a. Assets = _____________________

b. Liabilities = Unchanged from above

c. Owners Equity = _________________

d. Total Revenue = ________________

e. Total Expenses = $400

4- Isaac then pays another $2000 towards the truck loan. He also buys a snow blower so he can do walkways as well as driveways. He pays $700 cash for the snowblower.

How much is the value of each?

a. Assets = _____________________

b. Liabilities = ___________________

c. Owners Equity = Unchanged

5- Isaac completes several more plowing jobs and earns $1100 more. He spends $300 more on gas and pays $400 for the months rent on a garage to store his equipment.

How much is the value of each?

a. Assets = $32,600 (this is what you should have gotten)

b. Liabilities = ___________________

c. Owners Equity = _________________