Question

Requirements 1. Analyze the effects of the events on the accounting equation of Aaron Woody CPA. Use a format similar to Exhibit 1-5. 2. Prepare the following financial statements: a. Income statement. b. Statement of retained earnings. c. Balance sheet bjectives 4, 5 P1-53B Using the accounting equation for transaction analysis and preparing financial statements Aimee Griffin recently opened her own law office, which she operates as a corpo- ration. The name of the new entity is Aimee Griffin, Attorney. Griffin experienced Equity $122,020 the following events during the organizing phase of the new business and its first month of operation, December 2014. Some of the events were personal and did not affect the law practice. Others were business transactions and should be ac- counted for by the business. Dec. 1 Sold personal investment in eBay stock, which she had owned for several years 2 Deposited the $33,000 cash from the sale of the eBay stock in her personal 3 Deposited $109,000 cash in a new business bank account titled Aimee Griffin 5 Paid $900 cash for ink cartridges for the printer receiving $33,000 cash. bank account. Attorney Purchased computer for the law office, agreeing to pay the account, $9,200, The business issued common stock to Griffin. 7 9 15 23 within three months. Received $3,000 cash from customers for services rendered. Received bill from The Lawyer for magazine subscription, $80. Finished court hearings on behalf of a client and submitted a bill for legal services, $17,000, on account. 28 Paid bill from The Lawyer. 30 Paid utilties, $1,900. 31 Received $4,000 cash from clients billed on Dec. 23. 31 Cash dividends of $5,000 were paid to stockholders Requirements 1. Analyze the effects of the preceding events on the accounting equation of Aimee Griffin, Attorney. Use a format similar to Exhibit 1-5. 2. Prepare the following financial statements a. b. c. Income statement. Statement of retained earnings. Balance sheet.

Answer 1

Office Supplies Accounts Accounts Common Retained Net DateCash + +Computer+ Incomexpenses Receivable Payable Stock Earnin Income 3-Dec $109,000 5-Dec S (900) 7-Dec 9-Dec $ 3,000 15-Dec 23-Dec 28-Dec $ (80) 30-Dec (1,900) 31-Dec $ 4,000S 31-Dec $ (5,000) +$ 109,000+ $ 900 +9,200+ -$ 9,200+ $ 3,000$ 3,000 +$3,000 +17,000 +| $ (1,900)| 80 $17,000+ (80)+ | $ (1,900)|→ $ 1,900 4,000)+ $ (5,000) Total $108,120 $13,0009,200 900$9,200$109,000$ 13,020 $ 18,020|->| $20,000|-| $ 1,980

Income Statement Revenues Service Revenue $20,000 Expenses Magazine Subscription Expense Utilities Expense 80 S 1,900$ 1,980 Net Income $18,020

Statement of Retained Earnings Opening Balance Add: Net Income Less: Dividend Paid Closing Balance s 18,020 s 18,020

Balance Sheet Assets Current Assets Cash Accounts Receivable Office Supplies $108,120 13,000 $ 900 Fixed Assets $ 9,200 $131,220 Computer Total Assets Liabilities & Stockholder's Equity Liabilities $ 9,200 Accounts Payable Stockholder's Equity $109,000 S 18,020 Total Liabilities & Stockholder's Equity $136,220 Common Stock Retained Earnin gs

Note - Transactions done on Dec 1 and Dec 2 shall have no effect on the accounts of Aimee Griffin, Attorney.