CASE 1-3

IVAN'S PLOT

Ivan's Field Ivan's FieldBalance Sheet Statement Balance Sheet Statement

For the Beginning of the Season For the Beginning of the Season

ASSETS ASSETSBushels of Wheat 0 Bushels of Wheat 223Land 100 Land 100Seeds 20 Seeds 0Fertilizer 2 Fertilizer 0Ox 40 Ox 36

Total Assets 162 Total Assets 359

Liabilities 0 LiabilitiesAccounts Payable

Total Liabilities

Equity EquityCapital, Beginning 162 Capital, End

Total Equity 162 Total Equity

TOTAL LIABILITIES AND EQUITY 162 TOTAL LIABILITIES AND EQUITY

Ivan's Field Ivan's FieldIncome Statement Statement of Changes in Equity

For the Entire Harvesting Season For the End of the Season

Revenue 243 Capital BeginningLess: Seed Expense 20 Add: Profit

Fertilizer Expense 2 Total:Depreciation Expense 3 Less: WithdrawalsDepreciation Expense 4 29 Capital, End

Profit 214Withdrawal by Baron 20Increase in Retained Earning 194

FREDERICK'S PLOT

Frederick's Field Frederick's FieldBalance Sheet Statement Statement of Changes in Equity

For the Beginning of the Season For the End of the Season

ASSETS Capital BeginningBushels of Wheat 0 Add: ProfitLand 50 Total:Seeds 10 Less: WithdrawalsFertilizer 1 Capital, EndOx 40

Total Assets 101Frederick's Field

Balance Sheet StatementLiabilities 0 For the Beginning of the Season

ASSETSBushels of Wheat 105

Equity Land 50Capital, Beginning 101 Seeds 0

Total Equity 101 Fertilizer 0Ox 36

TOTAL LIABILITIES AND EQUITY 101 Plow 2Total Assets 193

Federick's FieldIncome Statement Liabilities

For the Entire Harvesting Season Accounts PayableTotal Liabilities

Revenue 138Less: Seed Expense 10 Equity

Fertilizer Expense 1 Capital, EndDepreciation Expense 1 Total EquityDepreciation Expense 4 16

Profit 122 TOTAL LIABILITIES AND EQUITYWithdrawal by Baron 30Increase in Retained Earning 92

2 Which peasant was the better farmer?

Answer: Frederick is the better farmer because he produced 12.2 Bushels of Wheat per acre (122 BW/10 acres of land), has saved two more season for the plow and left no liabilities. Ivan produced 10.7 Bushels of Wheat (214 BW/20 acres of land) which is 12.30% less than Fredericks

Ivan's FieldBalance Sheet Statement

For the Beginning of the Season

33

356356

359

Ivan's FieldStatement of Changes in Equity

For the End of the Season

162214376

20356

Frederick's FieldStatement of Changes in Equity

For the End of the Season

101122223

30193

Frederick's FieldBalance Sheet Statement

For the Beginning of the Season

00

193193

193

Frederick is the better farmer because he produced 12.2 Bushels of Wheat per acre (122 BW/10 acres of land), has saved two more season for the plow and left no liabilities. Ivan produced

Case 2-3

LONE PINE CAFEBALANCE SHEET AS OF NOVEMBER 2, 2009

AssetsCurrent AssetsCash $10,172.00Inventory $2,800.00Prepaid Expense $1,428.00

Total Current Assets $14,400.00Cafe Equipment $54,600.00

Total Assets $69,000.00Liabilities and Owners' Equity

Note Payable $21,000.00Owners' EquityMrs. Landers $16,000.00Mr. Antoine $16,000.00Mrs. Antoine $16,000.00 $48,000.00

Total Liabilities and Owners' Equity $69,000.00

Balance SheetMarch 30, 2010

LIABILITIES ASSETSOwners' Equity Fixed Assets

Mr. Antoine 16,000.00 11,526.50 Equipment 53,200.00 50,755.00Withdrawal 855.50 Less Depreciaition 2,445.00Loss (-) 3,618.00

Mrs. Landers 16,000.00 11,526.50 Current AssetsWithdrawal 855.50 Cash 1,900.00Loss (-) 3,618.00 Closing Stock 2,430.00

Mr. Antoine 16,000.00 12,382.00 Prepaid License Fee 833.00Loss (-) 3,618.00Current LiabilitiesCreditor 1,538.00Loan 18,900.00

TOTAL LIABILITIES 55,873.00 TOTAL ASSETS 55,918.00

Case 2-3

LONE PINE CAFEBALANCE SHEET

AS OF NOVEMBER 2, 2009

AssetsCurrent AssetsCash $10,172.00Inventory $2,800.00Prepaid Expense $1,428.00

Total Current Assets $14,400.00Cafe Equipment $54,600.00

Total Assets $69,000.00Liabilities and Owners' Equity

Note Payable $21,000.00Owners' EquityMrs. Landers $16,000.00Mr. Antoine $16,000.00Mrs. Antoine $16,000.00 $48,000.00

Total Liabilities and Owners' Equity $69,000.00

LONE PINE CAFEBalance Sheet

As of March 30, 2010LIABILITIES ASSETS

Owners' Equity Fixed AssetsMr. Antoine 16,000.00 11,526.50 Equipment 53,200.00 50,755.00

Withdrawal 855.50 Less Depreciaition 2,445.00Loss (-) 3,618.00

Mrs. Landers 16,000.00 11,526.50 Current AssetsWithdrawal 855.50 Cash 1,900.00Loss (-) 3,618.00 Closing Stock 2,430.00

Mr. Antoine 16,000.00 12,382.00 Prepaid License Fee 833.00Loss (-) 3,618.00Current LiabilitiesCreditor 1,538.00Loan 18,900.00

TOTAL LIABILITIES 55,873.00 TOTAL ASSETS 55,918.00