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Exercise 1:
ABC company has total assets for the year 2018 of 1,400,000 $ and total equity of 730,000 $.
1. Use the accounting equation to solve for the total equity?
2. Suppose that in 2019, total assets increased by 370,000$ and total equity increased by 220,000$, what would be the amount of total liabilities for the company?

Exercise 2:
Moon Market Company has a cash balance of 62,000$ at the beginning of the month of March. During that month, the following expenditures were made:
Inventory purchases: 36,000$;
Office supplies: 1,400$;
Repairs & maintenance: 1;850$;
Advertising expenses: 4,100$.
If the cash balance at the end of the month is 64,000$:
1. How much cash from sales did the company made?
2. Record all of these transactions on the journal entries listing which accounts to debit and which accounts to credit?

Exercise 3:
You company purchased a new machine that will help improving its productivity.
You are given the following information:
Gross purchasing price: 2,000,000 MAD;
10% discount;
Damages caused by negligence while transporting the machine: 37,000 MAD
Technician fees to install the machine: 15,000 MAD
Cables and electronic devices for the machine to be operational: 25,000 MAD;

1. Determine the cost of the asset?
2. Record the journal entry of this purchasing transaction?
3. Are we going to debit an asset account or expensing the cost? Explain why
Exercise 4:
Finetti Company purchased a new machine for 3,000,000 MAD and is expected to have a useful life of 8 years.
Its residual life at the end of its life is 500,000 MAD.
1. Using a straight-line depreciation method, compute the amount of yearly depreciation?
2. Record the journal entry of this transaction for year 1 and year 5?
3. Interpret your results in question 2?

Exercise 5:
Use the same information and data in exercise 4 to compute the yearly depreciation if the company is using the units of production method.
Suppose that the useful life in units is 120,000 and the company is expected to produce 20,000 units in the first year?

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