Entrepreneurship and Small Business Management

Balance Sheet

A balance sheet shows the financial position of your company on a certain date, and may be prepared monthly, quarterly, or annually. The balance sheet shows your total assets, total liabilities, and owner's equity. The balance sheet is designed with two columns: one for the assets and one for the liabilities and owner's equity. The sum of the assets must equal the sum of the liabilities and owner's equity.

Assets = Liabilities + Owner's Equity

Use the following information to answer questions 1-4. Jessa and Maria used $55,000 of their own money plus a $23,000 loan to start their clothing store. They received two shipments of merchandise. They paid cash for the $16,000 shipment. They did not pay immediately for the $6,000 shipment. They bought supplies for $11,000. They have $51,000 left in cash.

1.		What are Jessa and Maria's total assets (cash, merchandise inventory, and supplies)?
			A)	$74,000
			B)	$84,000
			C)	$92,000
			D)	$79,000
2.		What are Jessa and Maria's total liabilities (notes payable and accounts payable)?
			A)	$33,000
			B)	$19,000
			C)	$29,000
			D)	$22,000
3.		What is Jessa and Maria's owner's equity (cash they invested)?
			A)	$55,000
			B)	$23,000
			C)	$51,000
			D)	$27,000
4.		What are Jessa and Maria's total liabilities and owner's equity?
			A)	$55,000
			B)	$79,000
			C)	$84,000
			D)	$80,000
5.		A company has $12,000 cash, an inventory worth $42,000, and supplies worth $5,600. What are its total assets?
			A)	$54,500
			B)	$56,600
			C)	$62,600
			D)	$59,600
6.		A corporation owes $15,000 to the bank and $4,200 in accounts payable. It also owes $300 in wages. What are its total liabilities?
			A)	$19,200
			B)	$19,500
			C)	$21,500
			D)	$18,100
7.		In problem 6, the corporation's owner's equity is $55,000. What are its total assets?
			A)	$74,500
			B)	$73,200
			C)	$76,500
			D)	$82,100
8.		Paul's Olde Fashioned Pharmacy has $59,000 total liabilities. Its owner's equity is $72,000. What are the pharmacy's total assets?
			A)	$130,000
			B)	$13,000
			C)	$125,000
			D)	$131,000
9.		The Everything Store has $127,300 in cash, $259,800 in inventory, and $3,200 in supplies. What are its total assets?
			A)	$291,800
			B)	$375,100
			C)	$390,300
			D)	$303,900
10.		In problem 9, the Everything Store has a bank loan for $27,320 and owes $15,000 in taxes. What are its total liabilities?
			A)	$42,320
			B)	$51,600
			C)	$52,209
			D)	$42,140
11.		In problems 9 and 10, what is the owner's equity?
			A)	$332,780
			B)	$347,980
			C)	$39,980
			D)	$34,201
12.		Abacus International has $47,000 in cash, $257,800 of inventory, $82,000 in bank loans, and $7600 in accounts payable. What are its total assets?
			A)	$89,600
			B)	$304,800
			C)	$229,000
			D)	$207,800
13.		In problem 12, what are Abacus International's total liabilities?
			A)	$89,600
			B)	$304,000
			C)	$229,000
			D)	$207,800
14.		In problem 12, what is the owner's equity of Abacus International?
			A)	$200,900
			B)	$100,200
			C)	$215,200
			D)	$195,200
15.		A factory has $8,560 in cash and $11,260 in equipment. It owes $9,000 to the bank. What are its total assets?
			A)	$9000
			B)	$17,560
			C)	$20,260
			D)	$19,820
16.		In problem 15, what is the factory's total liabilities and owner's equity?
			A)	$17,560
			B)	$20,260
			C)	$19,820
			D)	$9,000
17.		In problems 15 and 16, what is the factory's owner's equity?
			A)	$9,000
			B)	$10,820
			C)	$11,200
			D)	$11,540
18.		Your store has $10,500 in cash, $41,000 in inventory, and $750 in supplies. What are your total assets?
			A)	$52,250
			B)	$51,550
			C)	$49,750
			D)	$48,250
19.		In problem 18, your store also owes $16,570 in a mortgage loan and $1,924 in taxes. What are the total liabilities?
			A)	$52,520
			B)	$17,774
			C)	$16,384
			D)	$18,494
20.		In problems 18 and 19, what is your owner's equity?
			A)	$34,476
			B)	$45,872
			C)	$32,244
			D)	$33,756