Accounting and Finance Foundations

Unit 7

Accounting and Finance Foundations Unit 7: Financial Statements 567

Financial Statements

Chapter 18

18.3.2

Student Assignment

Balance Sheet Word Problems & Exercise

1. If a pet store has assets of $219,542 and liabilities of $75,890, what is the amount of owner’s equity?


2. Nathan’s Card Shop had these assets on August 31: Cash, $3,600; Accounts Receivable, $4,890; Mer-
   chandise Inventory, $84,360; Supplies, $2,150; Store Equipment, $21,345; and Delivery Equipment,
   $22,567.

a. What were Nathan’s current assets?

b. What were Nathan’s long-term assets?

c. What were Nathan’s total assets?

3. Alan’s Flower Shop owed the following creditors for merchandise and store supplies: Tulip Suppliers,
   $4,289; Rose Garden, $3,921; Lily Wholesalers, $8,452; and Lilac, Inc., $4,071. The business also owed
   $65,000 to Farmers Bank on a 30-year mortgage and National Bank $15,000 on a 5-year loan.

a. What were the business’s current liabilities?

b. What were the business’s long-term liabilities?

4. Tammy owns a craft store with these assets: Cash, $5,500; Merchandise, $98,000; Store Equipment,
   $14,890; and Store Supplies, $1,200. She has accounts payable of $12,500.

a. What is the amount of Tammy’s total assets?

b. What is the amount of Tammy’s liabilities?

c. What is the amount of Tammy’s owner’s equity?

5. Sanders owns a hobby store with these assets: Cash, $8,900; Merchandise, $11,150; Store Equipment,
   $19,870; and Store Supplies, $2,870. He has accounts payable of $39,500.

a. What is the amount of Sanders’ total assets?

b. What is the amount of Sanders’ liabilities?

c. What is the amount of Sanders’ owner’s equity?