Martin Blair is the owner and operator of Martin Consultants. At ...

[Collmarie]

Martin Blair is the owner and operator of Martin Consultants. At December 31 of the current year, MartinConsultants has assets of 430,000 and liabilities of 205,000 . Using the accounting equation and considering eachcase independently, determine the following:
 a. Martin Blair, capital, as of December 31.
  b. Martin Blair, capital, as of December 31 of the next year, assuming that assets increased by 12,000and liabilities increased by 15,000.
  c. Martin Blair, capital, as of December 31 of the next year, assuming that assets decreased by 8,000and liabilities increased by 14,000.

Question 2

The entry to record adoption of a General Fund budget should include a
 
  a. debit to Estimated Revenues
  b. credit to Estimated Revenues.
  c. debit to Appropriations.
  d. debit to Encumbrances.

[Dunkey]

Answer to Question 1

a. 430,000  205,000 = 225,000
b. (430,000 + 12,000)  (205,000 + 15,000) = 222,000
c. (430,000  8,000)  (205,000 + 14,000) = 203,000

Answer to Question 2

A