Question

29 Received the telephone bill for September, $325. 30 Billed the government $10,000 for services provided to patients in September. Instructions (a) Beginning with the August 31 balances, prepare a tabular analysis of the effects of the September transactions on the accounting equation. (b) Prepare an income statement and statement of owner's equity for September, and a balance sheet at September 30. TAKING IT FURTHER What are the differences between purchasing an item on account and signing a note payable for the amount owing? P1-9A Pavlov's Home Renovations was started in 2008 by Jim Pavlov. Jim operates the business from an office Prepare financial statements. in his home. Listed below, in alphabetical order, are the company's assets and liabilities as at December 31, 2017, (LO6) AP and the revenues, expenses, and drawings for the year ended December 31, 2017: Accounts payable $ 7,850 Operating expenses $ 3,545 Accounts receivable 10,080 Prepaid insurance 1,685 Cash 8,250 Salaries expense 88,230 Equipment 29,400 Service revenue 153,750 Insurance expense 3,375 Supplies 595 Interest expense 1,195 Supplies expense 20,095 J. Pavlov, drawings 44,800 Unearned revenue 15,000 Notes payable 30,800 Vehicles 42,000 Jim's capital at the beginning of 2017 was $45,850. He made no investments during the year. Instructions Prepare an income statement, statement of owner's equity, and balance sheet. TAKING IT FURTHER Why is it necessary to prepare the income statement first, then the statement of owners equity, and the balance sheet last? int amounts

Answer 1

Pavlov's Home Renovations Income Statement For the Year Ended December 31, 2017 Revenues: Service Revenue Expenses: Salaries Expense 153,750 88,230 Operating Expenses Supplies Expense Insurance Expense Interest Expense 3,545 20,095 3,375 1,195 Total Expenses Net Income 116,440 37,310 Pavlov's Home Renovations Statement of Owner's Equity For the Year Ended December 31, 2017 J. Pavlov, Capital, Jan. 01, 2017 Add: Net Income 45,850 37,310 Less: Drawings 44,800 J. Pavlov, Capital, Dec. 31, 2017 38,360 %24

Pavlov's Home Renovations Balance Sheet For the Year Ended December 31, 2017 Assets Cash 8,250 Accounts Receivable Supplies Prepaid Insurance 10,080 595 1,685 Equipment Vehicles Total Assets 29,400 42,000 92,010 Liabilities and Owner's Equity Accounts Payable Unearned Revenue Notes Payable Total Liabilities J. Pavlov, Capital Total Liabilities and Owner's Equity 7,850 30,800 15,000 53,650 2$ 38,360 92,010