On April 1, 2014 Maria Adams etablished Custom Realty. Maria completed the following transactions...
On April 1, 2014 Maria Adams etablished Custom Realty.
Maria completed the following transactions during the month of April:
|A.||Opened a business bank account with a deposit of $24,000 from personal funds.|
|B.||Paid rent on office and equipment for the month $3,600.|
|C.||Paid automobile expenses (including rental charge) for month $1,350 and misc. expenses $600.|
|D.||Purchased office supplies on account $1,200.|
|E.||Earned sales commissions, receiving cash $19,800.|
|F.||Paid creditor on account $750.|
|G.||Paid office salaries $2,500.|
|H.||Withdrew cash for personal use $3,500.|
|I.||Determined that the cost of supplies on hand was $300; therefore; the cost of supplies used was $900.|
1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
|Assets = Liabilities + Owners Equity|
|Cash + Supplies = Accounts Payable + Capital - Drawing + Sales Commissions - Rent - Salaries - Auto - Supplies - Misc.|
2. Prepare an Income Statement for April, a Statement of Owners' Equity for April and a Balance Sheet as of April 30.
Financial statements are reports issued by a business in relation to its financial activities as of/and during the reporting period. The major financial statements include, among others, balance sheet, income statement, and statement of cash flows.
Answer and Explanation: 1
|Transaction||Cash +||Supplies =||Accounts payable +||Capital -||Drawing +||Sales commissions -||Rent -||Salaries -||Auto -||Supplies -||Miscellaneous|
|Statement of Owner's Equity|
|Maria Adams, Capital -beginning||24,000|
|Add; Net income||10,850|
|Maria Adams, Capital -ending||31,350|
|Assets||Liabilities and Owner's Equity|
|Cash||31,500||Accounts Payable 450|
|Owner's Equity 31,350|
|Total Assets||31,800||Total Liabilities and Owner's Equity 31,800|
Learn more about this topic:
fromChapter 2 / Lesson 1
Learn about the types and importance of financial statements. See the financial statement definition, and study the purpose of financial statements.