227. You are reviewing the accounting records of Cathy's Antiques, Inc. owned by Cathy Miller. You have uncovered the following situations. Compose a memo to Ms. Miller that cites the appropriate accounting principle and the suggested action for each separate situation.
In August, a check for $500 was written to Wee Day Care Center. This amount represents child care for her son Brandon.
Cathy plans a Going out of Business Sale for May, since she will be closing her business for a month-long vacation in June. She plans to reopen July 1 and will continue operating Cathy's Antiques indefinitely.
Cathy received a shipment of pine furniture from Quebec, Canada. The invoice was stated in Canadian dollars.
Joseph Clark paid $1,500 for a dining table. The amount was recorded as revenue. The table will be delivered to Mr. Clark in six weeks.
228. Lorton's Web Services has assets of $265,000 and liabilities of $130,000. Calculate the amount of equity.
229. A company has liabilities of $475,000 and $925,000 of equity. What is the amount of its assets?
230. A company has assets of $500,000 and equity of $350,000. What is the amount of liabilities?
231. At the beginning of the year, a company had $120,000 worth of liabilities. During the year, assets increased by $160,000 and at year-end they equaled $360,000. Liabilities decreased $20,000 during the year. Calculate the beginning and ending values of equity.