To solve this problem, we need to calculate several financial metrics, such as total assets, total liabilities, total expenses, net income, and ending owner's equity. Below is a detailed step-by-step solution to arrive at the values given:
1. Total Assets:
Total assets are calculated by adding the following:
- Cash
- Accounts Receivable
- Office Equipment
Given:
- Cash = $4,800
- Accounts Receivable = $1,230
- Office Equipment = $8,300
[tex]\[ \text{Total Assets} = \text{Cash} + \text{Accounts Receivable} + \text{Office Equipment} \][/tex]
[tex]\[ \text{Total Assets} = \[tex]$4,800 + \$[/tex]1,230 + \[tex]$8,300 = \$[/tex]14,330 \][/tex]
2. Total Liabilities:
Total liabilities are given by:
- Accounts Payable
Given:
- Accounts Payable = $4,000
[tex]\[ \text{Total Liabilities} = \$4,000 \][/tex]
3. Total Expenses:
Total expenses are calculated by adding the following:
- Salaries Expense
- Utilities Expense
- Rent Expense
Given:
- Salaries Expense = $550
- Utilities Expense = $200
- Rent Expense = $800
[tex]\[ \text{Total Expenses} = \text{Salaries Expense} + \text{Utilities Expense} + \text{Rent Expense} \][/tex]
[tex]\[ \text{Total Expenses} = \[tex]$550 + \$[/tex]200 + \[tex]$800 = \$[/tex]1,550 \][/tex]
4. Net Income:
Net income is calculated by subtracting total expenses from professional fees.
Given:
- Professional Fees = $3,000
- Total Expenses = $1,550
[tex]\[ \text{Net Income} = \text{Professional Fees} - \text{Total Expenses} \][/tex]
[tex]\[ \text{Net Income} = \[tex]$3,000 - \$[/tex]1,550 = \$1,450 \][/tex]
5. Ending Owner's Equity:
Ending owner's equity is calculated as follows:
[tex]\[ \text{Ending Equity} = \text{Beginning Capital} + \text{Net Income} - \text{Withdrawals} \][/tex]
Given:
- Beginning Capital = $9,000 (S. Frederick, Capital, Nov. 1, 2022)
- Net Income = $1,450
- Withdrawals = $120
[tex]\[ \text{Ending Equity} = \[tex]$9,000 + \$[/tex]1,450 - \[tex]$120 = \$[/tex]10,330 \][/tex]
By following these steps, the calculated figures are:
- Total Assets: $14,330
- Total Liabilities: $4,000
- Total Expenses: $1,550
- Net Income: $1,450
- Ending Owner's Equity: $10,330
All these values correspond exactly with the answer provided. Therefore, the calculations are accurate and verified.
