Reply To: The Random Post Thread (Game Potential)
Y’all are smart. Also generally old enough to have to deal with money.
George began a business. He leases land to customers in order to earn a profit. George collected $6,000 from an investor (contributed capital). He also borrowed $5,000 from a bank and purchased a piece of land for $8,000. During the year he leased the land to Sheila and received $3,000 in cash. He paid $2,500 cash for expenses during the year and paid an $800 dividend to the equity investor.
…How are they getting that he has $2700 cash? Similarly, how are they getting that Mary has $2000 cash in the following problem:
Mary began a business. She leases land to customers in order to earn a profit. She collected $30,000 from an equity investor (contributed capital) and borrowed $15,000 from a bank. She purchased a piece of land for $40,000. During the year she leased the land to Karl and received $12,000 in cash. She also paid $14,000 cash for expenses. She paid a $1,000 dividend to the equity investor at year end.
???
I’m confused.