Other Long-term Liabilities 44 Total Liabilities 393 Shareholders’ Equity Contributed Capital 358 Retained Earnings 20 Total Shareholders’ Equity 378 Total Liabilities and Shareholders’ Equity $771 Req. 6 As of December 31, 2014, the financing for Alezandray’s investment in assets has come primarily from liabilities. Liabilities financed $393,000,000 of the company’s assets and shareholders’ equity financed $378,000,000. ANSWERS TO GROUP B PROBLEMS PB2-1 Req. 1 Assets = Liabilities + Shareholders' Equity Notes Contributed Retained Cash Equipment Building Payable Capital Earnings (a) +109,000 = +109,000 (b) +186,000 = +186,000 (c) No effect = (d) +200,000 = –200,000 (e) +44,000 = +32,000 –12,000 (f) +4,000 = –4,000 +87,000 +40,000 +200,000 = +218,000 +109,000 Changes + $327,000 + $218,000 +$109,000 Req. 2 The transaction between the shareholder and another investor (event c) was not included in the spreadsheet. Because event occurs between an owner and another (c) investor, the separate entity assumption implies this transaction does not affect the business.
Other Long-term Liabilities 44 Total Liabilities 393 Shareholders’ Equity Contributed Capital 358 Retained Earnings 20 Total Shareholders’ Equity 378 Total Liabilities and Shareholders’ Equity $771 Req. 6 As of December 31, 2014, the financing for Alezandray’s investment in assets has come primarily from liabilities. Liabilities financed $393,000,000 of the company’s assets and shareholders’ equity financed $378,000,000. ANSWERS TO GROUP B PROBLEMS PB2-1 Req. 1 Assets = Liabilities + Shareholders' Equity Cash Equipment Building Notes Payable Contributed Capital Retained Earnings (a) +109,000 = +109,000 (b) +186,000 = +186,000 (c) No effect = (d) –200,000 +200,000 = (e) –12,000 +44,000 = +32,000 (f) +4,000 –4,000 = +87,000 +40,000 +200,000 = +218,000 +109,000 Changes + $327,000 + $218,000 +$109,000 Req. 2 The transaction between the shareholder and another investor (event c) was not included in the spreadsheet. Because event (c) occurs between an owner and another investor, the separate entity assumption implies this transaction does not affect the business.
Solution-Manual-Fundamentals-of-Financial-Accounting-Canadian-4th-Edition-Phillips.docx