Reference no: EM13590793
EX 1-1
Statement of owner's equity Financial information related to Lost Trail Company, a proprietorship, for the month ended June 30, 2012, is as follows: Net income for June $ 125,000 Penny Beall's withdrawals during June 18,000 Penny Beall's capital, June 1, 2012 375,000
a. Prepare a statement of owner's equity for the month ended June 30, 2012.
b. Why is the statement of owner's equity prepared before the June 30, 2012, balance sheet?
EX 1- 2
Income statement Universal Services was organized on October 1, 2012. A summary of the revenue and expense transactions for October follows:
- Fees earned $ 800,000
- Wages expense 270,000
- Rent expense 60,000
- Supplies expense 9,000 Miscellaneous
- expense 12,000
Prepare an income statement for the month ended October 31.
PR 1- 5A Transactions; financial statements Kean Dry Cleaners is owned and operated by Wally Lowman. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company at wholesale rates. The assets and the liabilities of the business on March 1, 2012, are as follows: Cash, $ 15,000; Accounts Receivable, $ 31,000; Supplies, $ 3,000; Land, $ 36,000; Accounts Payable, $ 13,000. Business transactions during March are summarized as follows:
a. Wally Lowman invested additional cash in the business with a deposit of $ 28,000 in the business bank account.
b. Paid $ 14,000 for the purchase of land as a future building site.
c. Received cash from cash customers for dry cleaning revenue, $ 17,000.
d. Paid rent for the month, $ 5,000.
e. Purchased supplies on account, $ 2,500.
f. Paid creditors on account, $ 12,800.
g. Charged customers for dry cleaning revenue on account, $ 34,000.
h. Received monthly invoice for dry cleaning expense for March ( to be paid on April 10), $ 13,500.
i. Paid the following: wages expense, $ 7,500; truck expense, $ 2,500; utilities expense, $ 1,300; miscellaneous expense, $ 2,700.
j. Received cash from customers on account, $ 28,000.
k. Determined that the cost of supplies on hand was $ 1,900; therefore, the cost of sup-plies used during the month was $ 3,600.
l. Withdrew $ 8,000 cash for personal use.
Instructions 1. Determine the amount of Wally Lowman's capital as of March 1 of the current year.
2. State the assets, liabilities, and owner's equity as of March 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate increases and decreases resulting from each transaction and the new balances after each transaction.
3. Prepare an income statement for March, a statement of owner's equity for March, and a balance sheet as of March 31. 4. ( Optional). Prepare a statement of cash flows for March.
EX 2- 1
Transactions and T accounts The following selected transactions were completed during August of the current year:
1. Billed customers for fees earned, $ 35,700.
2. Purchased supplies on account, $ 2,000.
3. Received cash from customers on account, $ 26,150.
4. Paid creditors on account, $ 800.
a. Journalize the above transactions in a two- column journal, using the appropriate num-ber to identify the transactions. Journal entry explanations may be omitted.
b. Post the entries prepared in ( a) to the following T accounts: Cash, Supplies, Accounts Receivable, Accounts Payable, Fees Earned. To the left of each amount posted in the accounts, place the appropriate number to identify the transactions.
c. Assume that the unadjusted trial balance on August 31 shows a credit balance for Accounts Receivable. Does this credit balance mean an error has occurred?
PR 2- 3A Journal entries and trial balance On April 1, 2012, Kathleen Alvarez established an interior decorating business, Intrex Designs. During the month, Kathleen completed the following transactions related to the business: Apr.
1. Kathleen transferred cash from a personal bank account to an account to be used for the business, $ 17,000.
2. Paid rent for period of April 2 to end of month, $ 3,400.
6. Purchased offi ce equipment on account, $ 10,000.
8. Purchased a used truck for $ 21,000, paying $ 2,000 cash and giving a note payable for the remainder.
10. Purchased supplies for cash, $ 1,800.
12. Received cash for job completed, $ 13,000.