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Chapter 1, Transaction Analysis & Financial Statements, pages 15 - 23 Assets = Liabilities + Owner's Equity
Assets Accounts 1) $ 2) 3) 4)
Cash Receivable 15,000 (7,000)
=
Liabilities Accounts
Supplies Equipment
Payable
7,000 1,600
1,600
1,200
5) 6) 7)
250 1,500 (1,700)
5, 8) 6, 9) 10)
(250) 600 (1,300) $
8,050 $ $
2,000
(250) (600)
1,400 $ 1,600 $ 18,050
summation of assets $
18,050
7,000
$
summation of liabilities & owner's equity $ 18,050 $ 18,050
Chapter 1, Transaction Analysis & Financial Statements, pages 15 - 23 Income Statement month ending September 30, 2012
Revenues Service Revenues Expenses Salaries & Wages Expense
$
(900)
4,700
1,600
+
Rent Expense Advertising Expense Utilities Expense Total Expenses
(600) (250) (200) (1,950)
Net Income
$
2,750
Owner's Equity Statement month ending September 30, 2012
Owner's Capital, September 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, September 30
0 $ 15,000 $ 2,750 17,750 $ (1,300) 16,450
Investment by Owner Drawings by Owners
net change in cash
cash at beginning of pe cash at end of period
Chapter 1, Transaction Analysis & Financial Statements, pages 15 - 23
Owner's Capital $ 15,000
Owner's Equity -Owner's Drawings
Revenues
-Expenses Initial Investment Equipment on cash Supplies on Credit Service Revenue
1,200 3,500
(250) Advertising Expense Service Revenue (900) Salaries & Wage Expense (600) Rent Expense (200) Utilities Expense
(1,300) $ 15,000 $ (1,300) $ $ 18,050 owner's cap/draw $ 13,700
4,700 $
(1,950)
net income $ 2,750
summation of owner's equity $ 16,450 $ 16,450
Chapter 1, Transaction Analysis & Financial Statements, pages 15 - 23 Balance Sheet month ending September 30, 2012
Assets Cash Accounts Receivable Supplies Equipment
$
8,050 1,400 1,600 7,000
Total Assets Liabilities & Owner's Equity Liabilities Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$
18,050
$
1,600
$
16,450 18,050
Statement of CashFlows month ending September 30, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses
$
3,300 (1,950)
Net Cash Provided by Operating Activities
$
1,350
Cash Flow from Investing Activities Purchase of Equipment
$
(7,000) paid cash so put it here
$
15,000 (1,300) 13,700
net change in cash
$
8,050
cash at beginning of period cash at end of period
$ $
8,050
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
Chapter 1, Transaction Analysis & Financial Statements, pages 15 - 23 Transactions 1) initial investment by owner, $15,000 cash, equal increase in assets and owner's equity 2) purchase of equipment for $7,000 cash, equal increases and decrease 3) purchase of supplies on $1,600 credit, assets and liabilities increase 4) services provided for $1,200 cash, revenue increases owner's equity 5) purchased advertising on $250 credit, increased liabilities and decreased owner's equity (expense) 6) services provided for $1,500 cash and $2,000 credit equal increase in assets and owners equity 7) payment of $1,700 expenses equal decrease in assets and expenses equal decrease in assets and owner's equity 8) payment of accounts payable (from #5) payment of $250 bill in cash equal decrease in cash and accounts payable 9) receipt of cash on account (from #6) received $600 in cash composition of assets changed 10) withdrawl of $1,300 in cash by owner equal decrease in assets and owner's equity
so put it here
Chapter 1, Transaction Analysis & Financial Statements, pages 21
Assets = Liabilities + Owner's Equity
Cash 1) $ 2) 3) 4) 5)
$
Assets Accounts Receivable Supplies Equipment
Liabilities Accounts Payable
25,000
+
Owner's Equity Owner's Capital $ 25,000
7,000
7,000
7,000
$ 7,000
8,000 (850) (1,000)
31,150 $
- $
summation of assets $
=
38,150
- $
summation of liabilities & owner's equity $ 38,150
$ 25,000
owner's cap/draw $ 24,000 summation of owner's equity $ 31,150
$ 38,150
Chapter 1, Transaction Analysis & Financial Statements, pages 21
Chapter 1, Transaction Analysis
Income Statement
Balance Sheet
month ending August 31, 2012
month ending August 31, 2012
Revenues Service Revenues
Assets Cash Accounts Receivable Supplies
Expenses
$ 8,000
Salaries & Wages Expense Rent Expense Advertising Expense Utilities Expense Total Expenses Net Income
(850) -
Equipment Total Assets
Liabilities & Owner's Equity Liabilities Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equit
(850) $ 7,150
Owner's Equity Statement month ending August 31, 2012
Statement of CashFlows Owner's Capital, September 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, September 30
0 25,000 7,150 32,150 (1,000) $ 31,150
month ending August 31, 2012
Cash Flows from Operating Acti cash receipts from revenues cash payments for expenses Net Cash Provided by Operating
Cash Flow from Investing Activi Purchase of Equipment
Cash Flow from Financing Activi Investment by Owners Drawings by Owners
net change in cash cash at beginning of period cash at end of period
Owner's Equity -Owner's Drawings Revenues -Expenses
8,000 (1,000)
$ (1,000) $ 8,000 $
owner's cap/draw
cash equpment on credit service provided (850) rent expense cash withdrawal
(850)
net income $ 7,150
ummation of owner's equity $ 31,150
Chapter 1, Transaction Analysis & Financial Statements, pages 21
Balance Sheet
month ending August 31, 2012
Accounts Receivable
$
31,150 -
Total Assets
$
7,000 38,150
$
7,000
$
31,150 38,150
iabilities & Owner's Equity
Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
Statement of CashFlows
month ending August 31, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities
Cash Flow from Investing Activities Purchase of Equipment
$ $
8,000 (850) 7,150
$
-
$
25,000 (1,000) 24,000
$
31,150
$ $
31,150
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
net change in cash
ash at beginning of period ash at end of period
Chapter 1, - pages 21
Transactions
1) Initial Investment by Owner, $25,000 Cash Equal Increase in Assets and Owner's Equity 2) Purchase of Equipment for $7,000 Credit Equal Increase in Total Assets and Total Liabilities 3) Services provided for $8,000 Cash Total Assets, Cash increased Revenue Increases Owner's Equity 4) Payment of $850 Rent Expenses, Cash Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 5) WithDrawl of $1,000 in cash by Owner Equal Decrease in Assets and Owner's Equity
Equipment paid on credit so it is zero
we start with zero
Chapter 1, Transaction Analysis & Financial Statements, pages 25 Income Statement
Flannagan Company
month ending December 31, 2012
Revenues Service Revenues
$ 36,000
Expenses Rent Expense Salaries & Wages Expense Utilities Expense Total Expenses
(11,000) (7,000) (4,000) (22,000)
Net Income
Balance Sheet
$ 14,000
Flannagan Company
month ending December 31, 2012
Assets Cash Accounts Receivable Supplies Equipment Total Assets Liabilities & Owner's Equity Liabilities Accounts Payable Note Payble Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$
8,000 9,000 10,000 $ 27,000 -
$ 2,000 16,500 $ 18,500 8,500 $ 27,000
Presented below is selected information related to Flanagan Company at December 31, 2012. Flanagan reports fi nancial information monthly. Equipment $10,000 Utilities Expense $ 4,000 Cash 8,000 Accounts Receivable 9,000 Service Revenue 36,000 Salaries and Wages Expense 7,000 Rent Expense 11,000 Notes Payable 16,500
Accounts Payable 2,000 Owner’s Drawings 5,000 (a) Determine the total assets of Flanagan Company at December 31, 2012. (b) Determine the net income that Flanagan Company reported for December 2012 (c) Determine the owner’s equity of Flanagan Company at December 31, 2012
Chapter 1, Transaction Analysis & Financial Statements, pages 26-27 Assets = Liabilities + Owner's Equity
Cash 1) $ 11,000 2) (800) 3) 4) 1,500 5) 700 6) 7) (500) (300) (100) 8 (1,000)
Assets Accounts Receivable Supplies Equipment
=
Liabilities Notes Accounts Payable Payable
3,000
3,000 700
2,000
$ 10,500 $ 2,000 $ - $ 3,000 Total Assets $ 15,500 summation of assets $ 15,500
$ 700 $ Total liability$
summation of liabilities & owner's equity $ 15,500 $ 15,500
Chapter 1, Transaction Analysis & Financial Statements, pages 26-27 Income Statement month ending July 31, 2012
Revenues Service Revenues Expenses Rent Expense Salaries & Wages Expense Utilities Expense Supplies Expense Total Expenses
$ 3,500
(800) (500) (300) (100) (1,700)
3,000 3,700
+
Net Income
$ 1,800
Owner's Equity Statement Owner's Capital July 1st, 2012
Owner's Capital, September 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, July 31
$0 11,000 1,800 12,800 (1,000) $ 11,800
Chapter 1, Transaction Analysis & Financial Statements, pages 26-27
Owner's Capital
Owner's Equity -Owner's Drawings Revenues -Expenses
$ 11,000
1,500 2,000
(800) Rent Expense Equipment on credit Service Revenue borrowed cash Service Revenue (500) expense (300) expense (100) expense
(1,000) $ 11,000 $ (1,000) $ 3,500 $ $ 11,800 owner's cap/draw $ 10,000
(1,700)
net income $ 1,800
summation of owner's equity $ 11,800 $ 11,800
Chapter 1, Transaction Analysis & Financial Statements, pages 26-27 Balance Sheet month ending July 31, 2012
Assets Cash Accounts Receivable Supplies Equipment Total Assets Liabilities & Owner's Equity Liabilities Notes Payable Accounts Payable
$
$
10,500 2,000 3,000 15,500
$ $
700 3,000
Total Liabilities Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
3,700
$
11,800 15,500
Statement of CashFlows month ending July 31, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities Cash Flow from Investing Activities Purchase of Equipment Cash Flow from Financing Activities Investment by Owners Proceeds from debt Drawings by Owners
$ $
1,500 (1,700) (200)
$
-
$
11,000 700 (1,000) 10,700
net change in cash
$
10,500
cash at beginning of period cash at end of period
$ $
10,500
$
Chapter 1, - pages 26 - 27 Transactions (July 2012)
1) Initial Investment by Owner, $11,000 Cash Equal Increase in Assets and Owner's Equity 2) Payment of $800 Rent Expense (July 2012) Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 3) Purchase of Equipment on $3,000 Credit Assets and Liabilities Increase 4) Legal Services provided for $1,500 Cash Revenue Increases Owner's Equity 5) Borrowed $700 Cash from Bank on Note Payable 6) Legal Services provided for $2,000 Credit Accounts Receivable Increases Revenue Increases Owner's Equity 7) Payment of $900 Expense (July 2012) Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 8) WithDrawl of $1,000 in cash by Owner Equal Decrease in Assets and Owner's Equity
Chapter 1, Transaction Analysis & Financial Statements, pages 37 Assets = Liabilities + Owner's Equity Assets Accounts Cash 1) $ 2) 3) 4) 5)
15,000 (2,000) (750) 4,600 (1,500)
6)
(2,000)
7) 8 9 10
(650) 450 (4,800) $
Receivable
8,350 $
Supplies Equipment
Payable
$3,000
750 3,900 (1,500)
(450)
3,450 $
17,550
750 $
5,000
$
summation of liabilities & owner's equity $ 17,550 $ 17,550
Chapter 1, Transaction Analysis & Financial Statements, pages 37 Income Statement month ending August 31, 2012
Revenues Service Revenues Expenses rent Expense salary Expense utilities Expense
$
8,500
(650) (4,800) (500)
Total Expenses Net Income
Liabilities Accounts
5,000
summation of assets $
=
(5,950) $
2,550
500 2,000
+
Owner's Equity Statement month ending August 31, 2012
Owner's Capital, September 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, September 30
0 15,000 2,550
$
17,550 (2,000) 15,550
Chapter 1, Transaction Analysis & Financial Statements, pages 37
Owner's Capital
Owner's Equity -Owner's Drawings
Revenues
-Expenses
$ 15,000
8,500 (2,000)
Ownerss drawing
$ 15,000 $ (2,000) $
owner's cap/draw $ 13,000
supplies Service Revenue
8,500 $
(650) rent Expense accounts receivable (4,800) salaries expense (500) Utilities expense (5,950) $ 15,550
net income $ 2,550
summation of owner's equity $ 15,550 $ 15,550
Chapter 1, Transaction Analysis & Financial Statements, pages 37 Balance Sheet month ending August 31, 2012
Assets Cash Accounts Receivable Supplies Equipment Total Assets Liabilities & Owner's Equity Liabilities Accounts Payable Owner's Equity Owner's Capital
$
$
8,350 3,450 750 5,000 17,550
$
2,000 15,550
Total Liabilities & Owner's Equity
$
17,550
$ $
5,050 (7,700) (2,650)
$
(2,000)
$
15,000 (2,000) 13,000
net change in cash
$
8,350
cash at beginning of period cash at end of period
$ $
8,350
Statement of CashFlows month ending August 31, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities Cash Flow from Investing Activities Purchase of Equipment Cash Flow from Financing Activities Investment by Owners Drawings by Owners
Chapter 1, Transaction Analysis & Financial Statements, pages 37 Transactions (August 2012)
1) Initial Investment by Owner, $15,000 Cash Equal Increase in Assets and Owner's Equity 2) Purchase of Equipment on $5,000 ($2,000 Cash, $3,000 Credit) Assets and Liabilities Increase 3) Purchase of supplies on $750 Cash Assets increased and decreased 4) Revenues of $8,500 earned $4,600 Cash ans $3,900 Credit Revenue Increases Owner's Equity Cash and Accounts Receivable Increases 5) Paid $1,500 Cash on Accounts Payable Equal Decrease in Assets and Owner's Equity 7) Payment of $650 Rent Expense (August 2012) Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 8) Received / Collected $450 Cash on Account Assets increased and decreased 9) Payment of $4,800 Expenses (August 2012) Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 10) Incurred $500 of Utilities Expenses on Account Liabilities Increased, Equity / Expenses Decreased
Problem Set P1 - A1 Chapter 1, Transaction Analysis & Financial Statements, page 39
Chapter 1, Transaction An
Assets = Liabilities + Owner's Equity a)
Assets Accounts Cash 1) $ 2) 3) 4)
5) 6)
Receivable
= Supplies Equipment
10,000 (5,000) (400) (500)
Payable
+
Owner's Owner's Capital $ 10,000
5,000 500 250
7) 8)
6,100 (1,000) (2,000)
9)
(170)
10) 10,11)
120 $
7,150 $
750 (120) 630 $
summation of assets $
13,280
500 $
=
5,000
$
summation of liabilities & owner's equity $ 13,280
250
$ 10,000
owner's cap/draw $ 9,000
summation of owner's equ $ 13,030
$ 13,280 b)
Liabilities Accounts
Net Income is $4,030 Chapter 1, Transaction Analysis & Financial Statements, page 39
Chapter 1, Transaction An
Income Statement
Balance Sheet
month ending May 31, 2012
month ending May 31, 2012
Revenues Service Revenues
Assets Cash Accounts Receivable Supplies Equipment Total Assets
Expenses Salaries & Wages Expense Rent Expense Advertising Expense
$
(2,000) (400) (250)
6,850
Utilities Expense Total Expenses
(170) (2,820)
Net Income
$
4,030
Liabilities & Owner's Equit Liabilities Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's
Owner's Equity Statement month ending May 31, 2012
Statement of CashFlows Owner's Capital, May 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, May 31
0 $ 10,000 $ 4,030 $ 14,030 $ (1,000) $ 13,030
month ending May 31, 2012
Cash Flows from Operating cash receipts from revenu cash payments for expens Net Cash Provided by Oper
Cash Flow from Investing A Purchase of Equipment
Cash Flow from Financing A Investment by Owners Drawings by Owners
net change in cash
cash at beginning of period cash at end of period
Chapter 1, Transaction Analysis & Financial Statements, page 39
Owner's Equity -Owner's Drawings
Revenues
-Expenses Initial Investment Equipment cash (400) Rent Expense cash Supplies cash
6,100 (1,000)
750
$ (1,000) $
owner's cap/draw
6,850
(250) Advertising Expense on account Service Revenue cash Owners Drawing (2,000) Salaries & Wage Expense cash (170) Utilities Expense cash Service Revenue received cash $120 from $750 $ (2,820)
net income $ 4,030
summation of owner's equity $ 13,030
Chapter 1, Transaction Analysis & Financial Statements, page 39
Balance Sheet
month ending May 31, 2012
$ Accounts Receivable
Total Assets
$
7,150 630 500 5,000 13,280
Liabilities & Owner's Equity
Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$
250
$
13,030 13,280
Statement of CashFlows
month ending May 31, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities
$
6,220 (3,070) 3,150
$
(5,000)
$
10,000 (1,000) 9,000
net change in cash
$
7,150
cash at beginning of period cash at end of period
$
0 7,150
Cash Flow from Investing Activities Purchase of Equipment
$
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
Problems: Set A – assignments Transactions P1-1A Threet’s Repair Shop was started on May 1 by Erica Threet. A summary of May transactions is presented below. 1. Invested $10,000 cash to start the repair shop. 2. Purchased equipment for $5,000 cash. 3. Paid $400 cash for May office rent. 4. Paid $500 cash for supplies. 5. Incurred $250 of advertising costs in the Beacon News on account. 6. Received $6,100 in cash from customers for repair service. 7. Withdrew $1,000 cash for personal use. 8. Paid part-time employee salaries $2,000. 9. Paid utility bills $170. 10. Provided repair service on account to customers $750. 11. Collected cash of $120 for services billed in transaction (10).
Instructions (a) Prepare a tabular analysis of the transactions, using the following column headings: Cash, Accounts Receivable,Supplies, Equipment, Accounts Payable, Owner’s Capital, Owner’s Drawings, Revenues, and Expenses (b) From an analysis of the owner’s equity columns, compute the net income or net loss for May. Ans - Net income = $4030
Problem Set P1 - 1B Chapter 1, Transaction Analysis & Financial Statements, page 41
Chapter 1, Transaction An
Assets = Liabilities + Owner's Equity a)
Assets Accounts Cash 1) $ 2) 3)
Receivable
=
Liabilities Accounts
Supplies Equipment
15,000 (600) (3,000)
Payable
+
Owner's Owner's Capital $ 15,000
3,000 700
4)
5) 6)
(800) 3,000 (500) (500)
7) 4, 8) 9)
6, 10) $
(2,500) 4,000 14,100 $
800 7,000 (500) (4,000) 3,000 $
summation of assets $
20,900
800 $
=
3,000
$
summation of liabilities & owner's equity $ 20,900
200
$ 15,000
owner's cap/draw $ 14,500
summation of owner's equ $ 20,700
$ 20,900
Chapter 1, Transaction Analysis & Financial Statements, page 41
Chapter 1, Transaction An
Income Statement
Balance Sheet
month ending April 30, 2012
month ending April 30, 2012
Revenues Service Revenues
Assets Cash Accounts Receivable Supplies Equipment Total Assets
Expenses Salaries & Wages Expense Rent Expense Advertising Expense Total Expenses
$ 10,000
(2,500) (600) (700) (3,800)
Liabilities & Owner's Equit Liabilities
Net Income
$
6,200
Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's
Owner's Equity Statement month ending April 30, 2012
Statement of CashFlows Owner's Capital, April 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, April 1
0 $ 15,000 $ 6,200 $ 21,200 $ (500) $ 20,700
month ending April 30, 2012
Cash Flows from Operating cash receipts from revenu cash payments for expens Net Cash Provided by Oper
Cash Flow from Investing A Purchase of Equipment
Cash Flow from Financing A Investment by Owners Drawings by Owners
net change in cash
cash at beginning of period cash at end of period
Chapter 1, Transaction Analysis & Financial Statements, page 41
Owner's Equity -Owner's Drawings
Revenues
-Expenses Initial Investment (600) Rent Expense cash Equipment (700) Advertising Expense on account
10,000 (500)
$
(500) $
owner's cap/draw
10,000
Supplies Service Revenue cash+Credit Owners Drawing Advertising expense (2,500) Salaries & Wage Expense cash Service Revenue $ (3,800)
net income $ 6,200
summation of owner's equity $ 20,700
Chapter 1, Transaction Analysis & Financial Statements, page 41
Balance Sheet
month ending April 30, 2012
Accounts Receivable
Total Assets
Liabilities & Owner's Equity
$
3,000 800 3,000 6,800
Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$
200
$
20,700 20,900
Statement of CashFlows
month ending April 30, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities
Cash Flow from Investing Activities Purchase of Equipment
$ $
7,000 (4,400) 2,600
$
(3,000)
$
15,000 (500) 14,500
$
14,100
$
0 14,100
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
net change in cash
cash at beginning of period cash at end of period
Problems: Set A – assignments Transactions P1-1B P1-1B On April 1, Vince Morelli established Vince’s Travel Agency. The following transactions were completed during the month. 1. Invested $15,000 cash to start the agency. 2. Paid $600 cash for April offi ce rent. 3. Purchased offi ce equipment for $3,000 cash. 4. Incurred $700 of advertising costs in the Chicago Tribune, on account. 5. Paid $800 cash for offi ce supplies. 6. Earned $10,000 for services rendered: $3,000 cash is received from customers, and the balance of $7,000 is billed to customers on account. 7. Withdrew $500 cash for personal use. 8. Paid Chicago Tribune $500 of the amount due in transaction (4). 9. Paid employees’ salaries $2,500.
10. Received $4,000 in cash from customers who have previously been billed in transaction (6).
Instructions (a) Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Owner’s Capital, Owner’s Drawings, Revenues, and Expenses. (b) From an analysis of the owner’s equity columns, compute the net income or net loss for April.
dings: Cash,
Problem Set P1 -2A Chapter 1, Transaction Analysis & Financial Statements, page 39 Assets = Liabilities + Owner's Equity
Balance 1) $ 2) 3) 4)
5) 6)
Cash 9,000 (2,900) 1,300 (800) 2,500
Assets Accounts Receivable Supplies Equipment 1,700 600 6,000
=
Liabilities Notes Accounts Payable Payable 3,600 $ (2,900)
(1,300) 2,100
1,300
5,300
(1,100) (1,700) (900) (450) 170
7
8 $
10,000 14,950 $
5,700 $
summation of assets $
29,350
600 $
=
8,100
$
summation of liabilities & owner's equity $ 29,350
Chapter 1, Transaction Analysis & Financial Statements, page 39 Income Statement month ending April 30, 2012
Revenues Service Revenues Expenses Salaries & Wages Expense Rent Expense Advertising Expense Utilities expense Total Expenses
$
7,800
(1,700) (900) (450) (170) (3,220)
10,000 10,000 $
2,170
Net Income
$
4,580
Owner's Equity Statement month ending April 30, 2012
Owner's Capital, April 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, April 1
0 $ 13,700 $ 4,580 $ 18,280 $ (1,100) $ 17,180
Chapter 1, Transaction Analysis & Financial Statements, page 39
+
Owner's Equity -Owner's Drawings Revenues
Owner's Capital 13,700
-Expenses Balance forward
Equipment Service revenue
7,800 (1,100)
Owners drawing (1,700) Salaries (900) Rent (450) Advertising (170) Utilities
$ 13,700 $
owner's cap/draw $ 12,600
(1,100) $
7,800
$
(3,220)
net income $ 4,580
summation of owner's equity $ 17,180 $ 17,180
Chapter 1, Transaction Analysis & Financial Statements, page 39 Balance Sheet month ending April 30, 2012
Assets Cash Accounts Receivable Supplies Equipment Total Assets Liabilities & Owner's Equity Liabilities
$
$
14,950 5,700 600 8,100 29,350
Accounts Payable Notes Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$ $
2,170 10,000
$
17,180 29,350
Statement of CashFlows month ending April 30, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities Cash Flow from Investing Activities Purchase of Equipment
$ $
$
(800)
$
(2,900) (900) (3,800)
$
7,650
$
0 7,650
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
net change in cash cash at beginning of period cash at end of period
2,500 9,750 12,250
Problems: Set A – assignments Transactions P1-2A P1-2A Ramona Castro opened a veterinary business in Nashville, Tennessee, on August 1. On August 31, the balance sheet showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable $3,600, and Owner’s Capital $13,700. During September, the following transactions occurred. 1. Paid $2,900 cash on accounts payable. 2. Collected $1,300 of accounts receivable. 3. Purchased additional offi ce equipment for $2,100, paying $800 in cash and the balance on account. 4. Earned revenue of $7,800, of which $2,500 is received in cash and the balance is due in October. 5. Withdrew $1,100 cash for personal use. 6. Paid salaries $1,700, rent for September $900, and advertising expense $450.
7. Incurred utilities expense for month on account $170. 8. Received $10,000 from Capital Bank (money borrowed on a note payable).
(a) Total assets $29,350 (b) Net income $4,580 Ending capital $17,180
Assets Accounts 1) $ 2) 3) 4)
Cash Receivable 15,000 (7,000)
=
Liabilities Accounts
Supplies Equipment
Payable
7,000 1,600
1,600
1,200
5) 6) 7)
250 1,500 (1,700)
5, 8) 6, 9) 10)
(250) 600 (1,300) $
8,050 $ $
2,000
(250) (600)
1,400 $ 1,600 $ 18,050
summation of assets $
18,050
7,000
$
summation of liabilities & owner's equity $ 18,050 $ 18,050
Chapter 1, Transaction Analysis & Financial Statements, pages 15 - 23 Income Statement month ending September 30, 2012
Revenues Service Revenues Expenses Salaries & Wages Expense
$
(900)
4,700
1,600
+
Rent Expense Advertising Expense Utilities Expense Total Expenses
(600) (250) (200) (1,950)
Net Income
$
2,750
Owner's Equity Statement month ending September 30, 2012
Owner's Capital, September 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, September 30
0 $ 15,000 $ 2,750 17,750 $ (1,300) 16,450
Investment by Owner Drawings by Owners
net change in cash
cash at beginning of pe cash at end of period
Chapter 1, Transaction Analysis & Financial Statements, pages 15 - 23
Owner's Capital $ 15,000
Owner's Equity -Owner's Drawings
Revenues
-Expenses Initial Investment Equipment on cash Supplies on Credit Service Revenue
1,200 3,500
(250) Advertising Expense Service Revenue (900) Salaries & Wage Expense (600) Rent Expense (200) Utilities Expense
(1,300) $ 15,000 $ (1,300) $ $ 18,050 owner's cap/draw $ 13,700
4,700 $
(1,950)
net income $ 2,750
summation of owner's equity $ 16,450 $ 16,450
Chapter 1, Transaction Analysis & Financial Statements, pages 15 - 23 Balance Sheet month ending September 30, 2012
Assets Cash Accounts Receivable Supplies Equipment
$
8,050 1,400 1,600 7,000
Total Assets Liabilities & Owner's Equity Liabilities Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$
18,050
$
1,600
$
16,450 18,050
Statement of CashFlows month ending September 30, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses
$
3,300 (1,950)
Net Cash Provided by Operating Activities
$
1,350
Cash Flow from Investing Activities Purchase of Equipment
$
(7,000) paid cash so put it here
$
15,000 (1,300) 13,700
net change in cash
$
8,050
cash at beginning of period cash at end of period
$ $
8,050
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
Chapter 1, Transaction Analysis & Financial Statements, pages 15 - 23 Transactions 1) initial investment by owner, $15,000 cash, equal increase in assets and owner's equity 2) purchase of equipment for $7,000 cash, equal increases and decrease 3) purchase of supplies on $1,600 credit, assets and liabilities increase 4) services provided for $1,200 cash, revenue increases owner's equity 5) purchased advertising on $250 credit, increased liabilities and decreased owner's equity (expense) 6) services provided for $1,500 cash and $2,000 credit equal increase in assets and owners equity 7) payment of $1,700 expenses equal decrease in assets and expenses equal decrease in assets and owner's equity 8) payment of accounts payable (from #5) payment of $250 bill in cash equal decrease in cash and accounts payable 9) receipt of cash on account (from #6) received $600 in cash composition of assets changed 10) withdrawl of $1,300 in cash by owner equal decrease in assets and owner's equity
so put it here
Chapter 1, Transaction Analysis & Financial Statements, pages 21
Assets = Liabilities + Owner's Equity
Cash 1) $ 2) 3) 4) 5)
$
Assets Accounts Receivable Supplies Equipment
Liabilities Accounts Payable
25,000
+
Owner's Equity Owner's Capital $ 25,000
7,000
7,000
7,000
$ 7,000
8,000 (850) (1,000)
31,150 $
- $
summation of assets $
=
38,150
- $
summation of liabilities & owner's equity $ 38,150
$ 25,000
owner's cap/draw $ 24,000 summation of owner's equity $ 31,150
$ 38,150
Chapter 1, Transaction Analysis & Financial Statements, pages 21
Chapter 1, Transaction Analysis
Income Statement
Balance Sheet
month ending August 31, 2012
month ending August 31, 2012
Revenues Service Revenues
Assets Cash Accounts Receivable Supplies
Expenses
$ 8,000
Salaries & Wages Expense Rent Expense Advertising Expense Utilities Expense Total Expenses Net Income
(850) -
Equipment Total Assets
Liabilities & Owner's Equity Liabilities Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equit
(850) $ 7,150
Owner's Equity Statement month ending August 31, 2012
Statement of CashFlows Owner's Capital, September 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, September 30
0 25,000 7,150 32,150 (1,000) $ 31,150
month ending August 31, 2012
Cash Flows from Operating Acti cash receipts from revenues cash payments for expenses Net Cash Provided by Operating
Cash Flow from Investing Activi Purchase of Equipment
Cash Flow from Financing Activi Investment by Owners Drawings by Owners
net change in cash cash at beginning of period cash at end of period
Owner's Equity -Owner's Drawings Revenues -Expenses
8,000 (1,000)
$ (1,000) $ 8,000 $
owner's cap/draw
cash equpment on credit service provided (850) rent expense cash withdrawal
(850)
net income $ 7,150
ummation of owner's equity $ 31,150
Chapter 1, Transaction Analysis & Financial Statements, pages 21
Balance Sheet
month ending August 31, 2012
Accounts Receivable
$
31,150 -
Total Assets
$
7,000 38,150
$
7,000
$
31,150 38,150
iabilities & Owner's Equity
Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
Statement of CashFlows
month ending August 31, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities
Cash Flow from Investing Activities Purchase of Equipment
$ $
8,000 (850) 7,150
$
-
$
25,000 (1,000) 24,000
$
31,150
$ $
31,150
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
net change in cash
ash at beginning of period ash at end of period
Chapter 1, - pages 21
Transactions
1) Initial Investment by Owner, $25,000 Cash Equal Increase in Assets and Owner's Equity 2) Purchase of Equipment for $7,000 Credit Equal Increase in Total Assets and Total Liabilities 3) Services provided for $8,000 Cash Total Assets, Cash increased Revenue Increases Owner's Equity 4) Payment of $850 Rent Expenses, Cash Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 5) WithDrawl of $1,000 in cash by Owner Equal Decrease in Assets and Owner's Equity
Equipment paid on credit so it is zero
we start with zero
Chapter 1, Transaction Analysis & Financial Statements, pages 25 Income Statement
Flannagan Company
month ending December 31, 2012
Revenues Service Revenues
$ 36,000
Expenses Rent Expense Salaries & Wages Expense Utilities Expense Total Expenses
(11,000) (7,000) (4,000) (22,000)
Net Income
Balance Sheet
$ 14,000
Flannagan Company
month ending December 31, 2012
Assets Cash Accounts Receivable Supplies Equipment Total Assets Liabilities & Owner's Equity Liabilities Accounts Payable Note Payble Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$
8,000 9,000 10,000 $ 27,000 -
$ 2,000 16,500 $ 18,500 8,500 $ 27,000
Presented below is selected information related to Flanagan Company at December 31, 2012. Flanagan reports fi nancial information monthly. Equipment $10,000 Utilities Expense $ 4,000 Cash 8,000 Accounts Receivable 9,000 Service Revenue 36,000 Salaries and Wages Expense 7,000 Rent Expense 11,000 Notes Payable 16,500
Accounts Payable 2,000 Owner’s Drawings 5,000 (a) Determine the total assets of Flanagan Company at December 31, 2012. (b) Determine the net income that Flanagan Company reported for December 2012 (c) Determine the owner’s equity of Flanagan Company at December 31, 2012
Chapter 1, Transaction Analysis & Financial Statements, pages 26-27 Assets = Liabilities + Owner's Equity
Cash 1) $ 11,000 2) (800) 3) 4) 1,500 5) 700 6) 7) (500) (300) (100) 8 (1,000)
Assets Accounts Receivable Supplies Equipment
=
Liabilities Notes Accounts Payable Payable
3,000
3,000 700
2,000
$ 10,500 $ 2,000 $ - $ 3,000 Total Assets $ 15,500 summation of assets $ 15,500
$ 700 $ Total liability$
summation of liabilities & owner's equity $ 15,500 $ 15,500
Chapter 1, Transaction Analysis & Financial Statements, pages 26-27 Income Statement month ending July 31, 2012
Revenues Service Revenues Expenses Rent Expense Salaries & Wages Expense Utilities Expense Supplies Expense Total Expenses
$ 3,500
(800) (500) (300) (100) (1,700)
3,000 3,700
+
Net Income
$ 1,800
Owner's Equity Statement Owner's Capital July 1st, 2012
Owner's Capital, September 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, July 31
$0 11,000 1,800 12,800 (1,000) $ 11,800
Chapter 1, Transaction Analysis & Financial Statements, pages 26-27
Owner's Capital
Owner's Equity -Owner's Drawings Revenues -Expenses
$ 11,000
1,500 2,000
(800) Rent Expense Equipment on credit Service Revenue borrowed cash Service Revenue (500) expense (300) expense (100) expense
(1,000) $ 11,000 $ (1,000) $ 3,500 $ $ 11,800 owner's cap/draw $ 10,000
(1,700)
net income $ 1,800
summation of owner's equity $ 11,800 $ 11,800
Chapter 1, Transaction Analysis & Financial Statements, pages 26-27 Balance Sheet month ending July 31, 2012
Assets Cash Accounts Receivable Supplies Equipment Total Assets Liabilities & Owner's Equity Liabilities Notes Payable Accounts Payable
$
$
10,500 2,000 3,000 15,500
$ $
700 3,000
Total Liabilities Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
3,700
$
11,800 15,500
Statement of CashFlows month ending July 31, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities Cash Flow from Investing Activities Purchase of Equipment Cash Flow from Financing Activities Investment by Owners Proceeds from debt Drawings by Owners
$ $
1,500 (1,700) (200)
$
-
$
11,000 700 (1,000) 10,700
net change in cash
$
10,500
cash at beginning of period cash at end of period
$ $
10,500
$
Chapter 1, - pages 26 - 27 Transactions (July 2012)
1) Initial Investment by Owner, $11,000 Cash Equal Increase in Assets and Owner's Equity 2) Payment of $800 Rent Expense (July 2012) Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 3) Purchase of Equipment on $3,000 Credit Assets and Liabilities Increase 4) Legal Services provided for $1,500 Cash Revenue Increases Owner's Equity 5) Borrowed $700 Cash from Bank on Note Payable 6) Legal Services provided for $2,000 Credit Accounts Receivable Increases Revenue Increases Owner's Equity 7) Payment of $900 Expense (July 2012) Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 8) WithDrawl of $1,000 in cash by Owner Equal Decrease in Assets and Owner's Equity
Chapter 1, Transaction Analysis & Financial Statements, pages 37 Assets = Liabilities + Owner's Equity Assets Accounts Cash 1) $ 2) 3) 4) 5)
15,000 (2,000) (750) 4,600 (1,500)
6)
(2,000)
7) 8 9 10
(650) 450 (4,800) $
Receivable
8,350 $
Supplies Equipment
Payable
$3,000
750 3,900 (1,500)
(450)
3,450 $
17,550
750 $
5,000
$
summation of liabilities & owner's equity $ 17,550 $ 17,550
Chapter 1, Transaction Analysis & Financial Statements, pages 37 Income Statement month ending August 31, 2012
Revenues Service Revenues Expenses rent Expense salary Expense utilities Expense
$
8,500
(650) (4,800) (500)
Total Expenses Net Income
Liabilities Accounts
5,000
summation of assets $
=
(5,950) $
2,550
500 2,000
+
Owner's Equity Statement month ending August 31, 2012
Owner's Capital, September 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, September 30
0 15,000 2,550
$
17,550 (2,000) 15,550
Chapter 1, Transaction Analysis & Financial Statements, pages 37
Owner's Capital
Owner's Equity -Owner's Drawings
Revenues
-Expenses
$ 15,000
8,500 (2,000)
Ownerss drawing
$ 15,000 $ (2,000) $
owner's cap/draw $ 13,000
supplies Service Revenue
8,500 $
(650) rent Expense accounts receivable (4,800) salaries expense (500) Utilities expense (5,950) $ 15,550
net income $ 2,550
summation of owner's equity $ 15,550 $ 15,550
Chapter 1, Transaction Analysis & Financial Statements, pages 37 Balance Sheet month ending August 31, 2012
Assets Cash Accounts Receivable Supplies Equipment Total Assets Liabilities & Owner's Equity Liabilities Accounts Payable Owner's Equity Owner's Capital
$
$
8,350 3,450 750 5,000 17,550
$
2,000 15,550
Total Liabilities & Owner's Equity
$
17,550
$ $
5,050 (7,700) (2,650)
$
(2,000)
$
15,000 (2,000) 13,000
net change in cash
$
8,350
cash at beginning of period cash at end of period
$ $
8,350
Statement of CashFlows month ending August 31, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities Cash Flow from Investing Activities Purchase of Equipment Cash Flow from Financing Activities Investment by Owners Drawings by Owners
Chapter 1, Transaction Analysis & Financial Statements, pages 37 Transactions (August 2012)
1) Initial Investment by Owner, $15,000 Cash Equal Increase in Assets and Owner's Equity 2) Purchase of Equipment on $5,000 ($2,000 Cash, $3,000 Credit) Assets and Liabilities Increase 3) Purchase of supplies on $750 Cash Assets increased and decreased 4) Revenues of $8,500 earned $4,600 Cash ans $3,900 Credit Revenue Increases Owner's Equity Cash and Accounts Receivable Increases 5) Paid $1,500 Cash on Accounts Payable Equal Decrease in Assets and Owner's Equity 7) Payment of $650 Rent Expense (August 2012) Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 8) Received / Collected $450 Cash on Account Assets increased and decreased 9) Payment of $4,800 Expenses (August 2012) Equal Decrease in Assets and Expenses Equal Decrease in Assets and Owner's Equity 10) Incurred $500 of Utilities Expenses on Account Liabilities Increased, Equity / Expenses Decreased
Problem Set P1 - A1 Chapter 1, Transaction Analysis & Financial Statements, page 39
Chapter 1, Transaction An
Assets = Liabilities + Owner's Equity a)
Assets Accounts Cash 1) $ 2) 3) 4)
5) 6)
Receivable
= Supplies Equipment
10,000 (5,000) (400) (500)
Payable
+
Owner's Owner's Capital $ 10,000
5,000 500 250
7) 8)
6,100 (1,000) (2,000)
9)
(170)
10) 10,11)
120 $
7,150 $
750 (120) 630 $
summation of assets $
13,280
500 $
=
5,000
$
summation of liabilities & owner's equity $ 13,280
250
$ 10,000
owner's cap/draw $ 9,000
summation of owner's equ $ 13,030
$ 13,280 b)
Liabilities Accounts
Net Income is $4,030 Chapter 1, Transaction Analysis & Financial Statements, page 39
Chapter 1, Transaction An
Income Statement
Balance Sheet
month ending May 31, 2012
month ending May 31, 2012
Revenues Service Revenues
Assets Cash Accounts Receivable Supplies Equipment Total Assets
Expenses Salaries & Wages Expense Rent Expense Advertising Expense
$
(2,000) (400) (250)
6,850
Utilities Expense Total Expenses
(170) (2,820)
Net Income
$
4,030
Liabilities & Owner's Equit Liabilities Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's
Owner's Equity Statement month ending May 31, 2012
Statement of CashFlows Owner's Capital, May 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, May 31
0 $ 10,000 $ 4,030 $ 14,030 $ (1,000) $ 13,030
month ending May 31, 2012
Cash Flows from Operating cash receipts from revenu cash payments for expens Net Cash Provided by Oper
Cash Flow from Investing A Purchase of Equipment
Cash Flow from Financing A Investment by Owners Drawings by Owners
net change in cash
cash at beginning of period cash at end of period
Chapter 1, Transaction Analysis & Financial Statements, page 39
Owner's Equity -Owner's Drawings
Revenues
-Expenses Initial Investment Equipment cash (400) Rent Expense cash Supplies cash
6,100 (1,000)
750
$ (1,000) $
owner's cap/draw
6,850
(250) Advertising Expense on account Service Revenue cash Owners Drawing (2,000) Salaries & Wage Expense cash (170) Utilities Expense cash Service Revenue received cash $120 from $750 $ (2,820)
net income $ 4,030
summation of owner's equity $ 13,030
Chapter 1, Transaction Analysis & Financial Statements, page 39
Balance Sheet
month ending May 31, 2012
$ Accounts Receivable
Total Assets
$
7,150 630 500 5,000 13,280
Liabilities & Owner's Equity
Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$
250
$
13,030 13,280
Statement of CashFlows
month ending May 31, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities
$
6,220 (3,070) 3,150
$
(5,000)
$
10,000 (1,000) 9,000
net change in cash
$
7,150
cash at beginning of period cash at end of period
$
0 7,150
Cash Flow from Investing Activities Purchase of Equipment
$
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
Problems: Set A – assignments Transactions P1-1A Threet’s Repair Shop was started on May 1 by Erica Threet. A summary of May transactions is presented below. 1. Invested $10,000 cash to start the repair shop. 2. Purchased equipment for $5,000 cash. 3. Paid $400 cash for May office rent. 4. Paid $500 cash for supplies. 5. Incurred $250 of advertising costs in the Beacon News on account. 6. Received $6,100 in cash from customers for repair service. 7. Withdrew $1,000 cash for personal use. 8. Paid part-time employee salaries $2,000. 9. Paid utility bills $170. 10. Provided repair service on account to customers $750. 11. Collected cash of $120 for services billed in transaction (10).
Instructions (a) Prepare a tabular analysis of the transactions, using the following column headings: Cash, Accounts Receivable,Supplies, Equipment, Accounts Payable, Owner’s Capital, Owner’s Drawings, Revenues, and Expenses (b) From an analysis of the owner’s equity columns, compute the net income or net loss for May. Ans - Net income = $4030
Problem Set P1 - 1B Chapter 1, Transaction Analysis & Financial Statements, page 41
Chapter 1, Transaction An
Assets = Liabilities + Owner's Equity a)
Assets Accounts Cash 1) $ 2) 3)
Receivable
=
Liabilities Accounts
Supplies Equipment
15,000 (600) (3,000)
Payable
+
Owner's Owner's Capital $ 15,000
3,000 700
4)
5) 6)
(800) 3,000 (500) (500)
7) 4, 8) 9)
6, 10) $
(2,500) 4,000 14,100 $
800 7,000 (500) (4,000) 3,000 $
summation of assets $
20,900
800 $
=
3,000
$
summation of liabilities & owner's equity $ 20,900
200
$ 15,000
owner's cap/draw $ 14,500
summation of owner's equ $ 20,700
$ 20,900
Chapter 1, Transaction Analysis & Financial Statements, page 41
Chapter 1, Transaction An
Income Statement
Balance Sheet
month ending April 30, 2012
month ending April 30, 2012
Revenues Service Revenues
Assets Cash Accounts Receivable Supplies Equipment Total Assets
Expenses Salaries & Wages Expense Rent Expense Advertising Expense Total Expenses
$ 10,000
(2,500) (600) (700) (3,800)
Liabilities & Owner's Equit Liabilities
Net Income
$
6,200
Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's
Owner's Equity Statement month ending April 30, 2012
Statement of CashFlows Owner's Capital, April 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, April 1
0 $ 15,000 $ 6,200 $ 21,200 $ (500) $ 20,700
month ending April 30, 2012
Cash Flows from Operating cash receipts from revenu cash payments for expens Net Cash Provided by Oper
Cash Flow from Investing A Purchase of Equipment
Cash Flow from Financing A Investment by Owners Drawings by Owners
net change in cash
cash at beginning of period cash at end of period
Chapter 1, Transaction Analysis & Financial Statements, page 41
Owner's Equity -Owner's Drawings
Revenues
-Expenses Initial Investment (600) Rent Expense cash Equipment (700) Advertising Expense on account
10,000 (500)
$
(500) $
owner's cap/draw
10,000
Supplies Service Revenue cash+Credit Owners Drawing Advertising expense (2,500) Salaries & Wage Expense cash Service Revenue $ (3,800)
net income $ 6,200
summation of owner's equity $ 20,700
Chapter 1, Transaction Analysis & Financial Statements, page 41
Balance Sheet
month ending April 30, 2012
Accounts Receivable
Total Assets
Liabilities & Owner's Equity
$
3,000 800 3,000 6,800
Accounts Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$
200
$
20,700 20,900
Statement of CashFlows
month ending April 30, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities
Cash Flow from Investing Activities Purchase of Equipment
$ $
7,000 (4,400) 2,600
$
(3,000)
$
15,000 (500) 14,500
$
14,100
$
0 14,100
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
net change in cash
cash at beginning of period cash at end of period
Problems: Set A – assignments Transactions P1-1B P1-1B On April 1, Vince Morelli established Vince’s Travel Agency. The following transactions were completed during the month. 1. Invested $15,000 cash to start the agency. 2. Paid $600 cash for April offi ce rent. 3. Purchased offi ce equipment for $3,000 cash. 4. Incurred $700 of advertising costs in the Chicago Tribune, on account. 5. Paid $800 cash for offi ce supplies. 6. Earned $10,000 for services rendered: $3,000 cash is received from customers, and the balance of $7,000 is billed to customers on account. 7. Withdrew $500 cash for personal use. 8. Paid Chicago Tribune $500 of the amount due in transaction (4). 9. Paid employees’ salaries $2,500.
10. Received $4,000 in cash from customers who have previously been billed in transaction (6).
Instructions (a) Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Owner’s Capital, Owner’s Drawings, Revenues, and Expenses. (b) From an analysis of the owner’s equity columns, compute the net income or net loss for April.
dings: Cash,
Problem Set P1 -2A Chapter 1, Transaction Analysis & Financial Statements, page 39 Assets = Liabilities + Owner's Equity
Balance 1) $ 2) 3) 4)
5) 6)
Cash 9,000 (2,900) 1,300 (800) 2,500
Assets Accounts Receivable Supplies Equipment 1,700 600 6,000
=
Liabilities Notes Accounts Payable Payable 3,600 $ (2,900)
(1,300) 2,100
1,300
5,300
(1,100) (1,700) (900) (450) 170
7
8 $
10,000 14,950 $
5,700 $
summation of assets $
29,350
600 $
=
8,100
$
summation of liabilities & owner's equity $ 29,350
Chapter 1, Transaction Analysis & Financial Statements, page 39 Income Statement month ending April 30, 2012
Revenues Service Revenues Expenses Salaries & Wages Expense Rent Expense Advertising Expense Utilities expense Total Expenses
$
7,800
(1,700) (900) (450) (170) (3,220)
10,000 10,000 $
2,170
Net Income
$
4,580
Owner's Equity Statement month ending April 30, 2012
Owner's Capital, April 1 Add: Investments Add: Net Income Less: Drawings Owner's Capital, April 1
0 $ 13,700 $ 4,580 $ 18,280 $ (1,100) $ 17,180
Chapter 1, Transaction Analysis & Financial Statements, page 39
+
Owner's Equity -Owner's Drawings Revenues
Owner's Capital 13,700
-Expenses Balance forward
Equipment Service revenue
7,800 (1,100)
Owners drawing (1,700) Salaries (900) Rent (450) Advertising (170) Utilities
$ 13,700 $
owner's cap/draw $ 12,600
(1,100) $
7,800
$
(3,220)
net income $ 4,580
summation of owner's equity $ 17,180 $ 17,180
Chapter 1, Transaction Analysis & Financial Statements, page 39 Balance Sheet month ending April 30, 2012
Assets Cash Accounts Receivable Supplies Equipment Total Assets Liabilities & Owner's Equity Liabilities
$
$
14,950 5,700 600 8,100 29,350
Accounts Payable Notes Payable Owner's Equity Owner's Capital Total Liabilities & Owner's Equity
$ $
2,170 10,000
$
17,180 29,350
Statement of CashFlows month ending April 30, 2012
Cash Flows from Operating Activities cash receipts from revenues cash payments for expenses Net Cash Provided by Operating Activities Cash Flow from Investing Activities Purchase of Equipment
$ $
$
(800)
$
(2,900) (900) (3,800)
$
7,650
$
0 7,650
Cash Flow from Financing Activities Investment by Owners Drawings by Owners
net change in cash cash at beginning of period cash at end of period
2,500 9,750 12,250
Problems: Set A – assignments Transactions P1-2A P1-2A Ramona Castro opened a veterinary business in Nashville, Tennessee, on August 1. On August 31, the balance sheet showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable $3,600, and Owner’s Capital $13,700. During September, the following transactions occurred. 1. Paid $2,900 cash on accounts payable. 2. Collected $1,300 of accounts receivable. 3. Purchased additional offi ce equipment for $2,100, paying $800 in cash and the balance on account. 4. Earned revenue of $7,800, of which $2,500 is received in cash and the balance is due in October. 5. Withdrew $1,100 cash for personal use. 6. Paid salaries $1,700, rent for September $900, and advertising expense $450.
7. Incurred utilities expense for month on account $170. 8. Received $10,000 from Capital Bank (money borrowed on a note payable).
(a) Total assets $29,350 (b) Net income $4,580 Ending capital $17,180