Assets and Liabilities for Stan's Garage at the Beginning and End

question 45

Essay

Assets and liabilities for Stan's Garage at the beginning and end of the current accounting period are as follows: $\begin{array} { l c c } & \text { January 1 } & \text { December 31 } \\ \text { Total assets } & \$ 450,000 & \$ 690,000 \\ \text { Total liabilities } & \$ 325,000 & \$ 440,000 \end{array}$

a) $\text {Determine net income or net loss for the current year. The owner did not invest any additional assets during the year and made no withdrawals.}$
b) $\text {Determine net income or net loss for the current year. The owner invested an additional \(\$ 100,000\) of assets into the business during the year and made no withdrawals.}$

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Definitions:

Contract Rate

The agreed-upon price or interest rate specified within a contract.

Bond Indenture

A legal document specifying the terms and conditions of a bond issue, including the interest rate, maturity date, and other obligations of the issuer.

Bondholders

Individuals or institutions that hold the debt securities issued by corporations or governmental entities.

Discount on Bonds Payable

The difference between the par value of a bond and its lower selling price, recognized as an expense over the life of the bond.