Question

1. Complete the accounting equation for Business Solutions using the amounts in this format:     $______ = $_______ + $_____________
2. In discussing Business Solutions latest financial statements, you as the manager say that it is the “the net income results on the bottom line” that really count. What do you mean? Which financial statement are you referring to? Are the results reflected on your financial statement satisfactory?   Explain your answer.
3. Does Business Solutions have enough cash to pay its liabilities? Please list the amounts and the overage amount or shortfall. Does Business Solutions need to improve this situation? If not, please describe what they are doing correctly, if so, please describe how they may improve.

Business Solutions Unadjusted Trial Balance Adjusted Trial Balance Post-Closing Trial Balance Credit Credit Credit Debit 51,301 4,968 4745 1,980 3300 8,400 Debit 51,301 4,968 650 Debit 51,301 4,986 650 1,485 825 8,400 1,485 825 8,400 420 420 22,400 22,400 22,400 1,400 1,400 2,100 December 31, 2018 5 # Account 6 101 Cash 7 106 Accounts receivable 8 126 Computer supplies 9 128 Prepaid insurance 10 131 Prepaid rent 11 163 Office equipment 164 Accumulated depreciation-office equipment 13 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 16 210 Wages payable 17 236 Unearned computer services revenue 18 307 Common stock 19 318 Retained earnings 20 319 Dividends 21 403 Computer services revenue 22 612 Depreciation expense-Office equipment 23 613 Depreciation expense-Computer equipment 24 623 Wages expense 25 637 Insurance expense 26 640 Rent expense 27 652 Computer supplies expense 28 655 Advertising expense 29 676 Mileage expense 30 677 Miscellaneous expenses 31 684 Repairs expense-Computer Income Summary 2,500 65,000 34494 2,100 440 2,500 65,000 18169 2,100 440 2,500 65,000 18169 7000 7000 42,169 42169 2860 420 1,400 3300 495 2,475 4,095 2648 792 200 1175 18,169 2648 792 200 1175 34,494 1 Totals 146,263 146,263 132,198 132,198 D 90,029 9 0,029

Answer 1

Solution

1

the accounting equation = Asset= capital+ liabilities

the accounting equation for Business Solutions using the amounts in this format:     $ 88227  = $ 83169+ $ 5040

2.

It is the “the net income results on the bottom line” that really count.When welook at a company's income statement, the bottom line is usually labeled "net income", although it is also referred to as net profit or net earnings. Net income is the amount remaining after all costs and taxes are subtracted from the gross sales a business generates during a year or other accounting period. Net income is crucial when it comes to measuring how profitable a business is during a given period of time.

3.

we are referring to the Income statement. The most important financial statement for the majority of users is likely to be the income statement, since it reveals the ability of a business to generate a profit. Also, the information listed on the income statement is mostly in relatively current dollars, and so represents a reasonable degree of accuracy

4.

The results reflected on your financial statement satisfactory due to the following

Total revenue: 42169

(-)Total expenses: 17000

(-) Dividend :7000

Total Profit: 18169