The Assets and Liabilities of Amos Moving Services at March

question 189

Essay

The assets and liabilities of Amos Moving Services at March 31, 2014, the end of the current year, and its revenue and expenses for the year are listed below. The capital of the owner was $180,000 at April 1, 2013, the beginning of the current year. Mr. Amos invested an additional $25,000 in the business during the year.
$\begin{array}{llll}\text { Accounts Payable } & \$ 2,000 & \text { Miscellaneous Expense } &\$ 1,030\\\text { Accounts Receivable } & \$ 10,340 & \text { Office Expense } &\$1,240\\\text { Cash } & \$ 21,420 & \text { Supplies } & \$1,670\\\text { Fees Earned } & \$ 73,450 & \text { Wages Expense } &\$23,550\\\text { Land } & \$ 47,000 & \text { Drawing }&\$16,570\\Building&\$ 157,630\end{array}$ Prepare a statement of owner's equity for the current year ended March 31, 2014.

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Definitions:

Discount Rate

In discounted cash flow analysis, this is the interest rate utilized to calculate the present value of cash flows expected in the future.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows over a period of time.

Working Capital

The difference between a company's current assets and its current liabilities, indicating the liquidity and operational efficiency of the business.

Salvage Value

The forecasted value at which an asset can be resold once it's no longer useful.