# MBA 5010 Webster University Week 7 The Balance Sheet Equation Discussion

MBA 5010 Week 7 Assignment (Rev 2)

The weekly assignments are intended to be completed individually. It is important in an online program that you pay careful attention to when it is and is not appropriate to work with peers. Misunderstandings can have significant consequences. By submitting this assignment, you are attesting that you completed this work without assistance from another current or former student of this class. Exceptions can be made for tutors, but only with prior consent from your instructor.

Your answer will be evaluated based on correctness, completeness, and clarity. Be attentive to your writing. You have until midnight CST Sunday to submit both parts of this assignment.

Part A (25 points)

Question 1 – In words, explain why the balance sheet equation must balance.

Respond here

Question 2 – What is the meaning of (owner’s) equity?

Respond here

Question 3 – Downriver Excursions LLC buys a new boat on credit for \$10,000. How does this affect the income statement, balance sheet, and statement of cash flows for that calendar year? What if anything will be affected and by how much?

Income Statement?

Balance Sheet?

Statement of Cash Flows?

Question 4 – Pulse, a dance club, saw a \$40,000 drop in revenue during 2020 due to the Covid-19 virus. How will this affect the 2020 incomes statement, balance sheet, and statement of cash flows? What if anything will be affected and by how much?

Income Statement?

Balance Sheet?

Statement of Cash Flows?

Question 5 – Based on the following financial information, construct the balance sheet and

income statement for Tonka Trucking LLC for the year ending December 31, 2019.

Accounts Receivable \$40,000

Depreciation Expense \$50,000

Accumulated Depreciation \$200,000

Cost of Goods Sold \$50,000

Income Tax Expense \$50,000

Cash \$50,000

Sales Revenue \$400,000

Equipment (Before Accumulated Depreciation) \$400,000

Selling, General, and Administrative Expenses \$100,000

Common Stock (1,000 shares) \$100,000

Accounts Payable \$50,000

Retained Earnings \$100,000

Interest Expense \$50,000

Inventory \$10,000

Long-term Debt \$50,000

Balance Sheet here…

Income Statement here…

Part B (25 points)

You are to complete a fully complete draft response to the following questions. You are to complete this draft without assistance from either current or former MBA 5010 students. This draft response will be evaluated on completeness and clarity but not graded for content. Next week you’ll be given an opportunity to collaborate with your peers to complete a final response.

This week we will return one last time to the sharing economy. Your assignment is to develop the concept for a new business for this market space. For example, you may decide that there ought to be a business coordinating the sharing of lawn mowers. (You don’t have to pull a Fred Smith on this assignment.)

There are two main deliverables. First, you’re to work out the value proposition including target market, problem addressed, your solution, and the points of difference between your solution and what’s currently available. Limit this part to 500 words, if possible.

Second, you’re to specify how your business might attempt to capture some portion of the value generated and answer whether that value would be sufficient to build a viable business. Limit this part to roughly 250 words.

Respond here