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Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta
Edition 22ISBN: 978-0077862275Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta
Edition 22ISBN: 978-0077862275 Exercise 65
Refer to this chapter's opening feature about Apple. Assume that the owners decide to open a new company with an innovative mobile app devoted to microblogging for accountants and those learning accounting. This new company will be called AccountApp.
Required
1. AccountApp obtains a $500,000 loan and the two owners contribute $250,000 in total from their own savings in exchange for common stock in the new company.
a. What is the new company's total amount of liabilities plus equity
b. What is the new company's total amount of assets
2. If the new company earns $80,250 in net income in the first year of operation, compute its return on assets (assume average assets equal $750,000). Assess its performance if competitors average a 10% return.
Reference: Opening feature about Apple
Summary of Transactions Using the Accounting Equation
Required
1. AccountApp obtains a $500,000 loan and the two owners contribute $250,000 in total from their own savings in exchange for common stock in the new company.
a. What is the new company's total amount of liabilities plus equity
b. What is the new company's total amount of assets
2. If the new company earns $80,250 in net income in the first year of operation, compute its return on assets (assume average assets equal $750,000). Assess its performance if competitors average a 10% return.
Reference: Opening feature about Apple
Summary of Transactions Using the Accounting Equation
Explanation
Verified
Verified
Balance sheet
Balance sheet refers to t...
Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta
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