# Accounting Equation Exercises

by Kevin
(North Carolina, USA)

Q: Tom Jones is the owner and operator of Jones Enterprise, a motivational consulting business. At the end of its accounting period, December 31, 2009, Jones Enterprise has assets of \$760,000 and liabilities of 240,000.

Use the accounting equation to calculate the answers in each of the following:

a) Tom Jones, capital, as of December 31, 2009

b) Tom Jones, capital, as of December 31, 2010, assuming that assets increased by \$120,000 and liabilities increased by \$72,000 during 2010

c) Tom Jones, capital, as of December 31, 2010, assuming that assets decreased by \$60,000 and liabilities increased by \$21,600 during 2010

d) Tom Jones, capital, as of December 31, 2010, assuming that assets increased by \$100,000 and liabilities decreased by \$38,400 during 2010

e) Net income during 2010, assuming that as of December 31, 2010, assets were \$960,000, liabilities were \$156,000, and there were no additional investments or withdrawals.

SOLUTIONS BELOW:

ASSETS = OWNER'S EQUITY + LIABILITIES
December 31, 2009
\$760,000
a) \$520,000
\$240,000
Changes during 2010
+ \$120,000
+ \$72,000
December 31, 2010
\$880,000
b) \$568,000
\$312,000

ASSETS = OWNER'S EQUITY + LIABILITIES
December 31, 2009
\$760,000
\$520,000
\$240,000
Changes during 2010
- \$60,000
+ \$21,600
December 31, 2010
\$700,000
c) \$438,400
\$261,600

ASSETS = OWNER'S EQUITY + LIABILITIES
December 31, 2009
\$760,000
\$520,000
\$240,000
Changes during 2010
+ \$100,000
- \$38,400
December 31, 2010
\$860,000
d) \$658,400
\$201,600

ASSETS = OWNER'S EQUITY + LIABILITIES
December 31, 2009
\$760,000
\$520,000
\$240,000
Changes during 2010
(net income)
e) \$284,000
December 31, 2010
\$960,000
\$804,000
\$156,000

Hope you enjoyed these accounting equation exercises!

### Comments for Accounting Equation Exercises

 Excellent by: Ms Matlenya student at Richfield graduate Am a first year student with no background knowledge on accounting but the exercises gave me an idea on the accounting basics, thank you!

 edsd by: thevine this is easy to for reference but its not clearly mentioned as noticed

 accounting equation by: Anonymous really enjoyed the equation.

 WHOO by: Anonymous Whoo accounting is fun it like a game to me ...it is fun......lol

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