Question

The following account balances, in alphabetical order, are from the general ledger of Anil's Hacking Service at January 31, 20X1. The firm's accounting year began on January 1. All accounts had normal balances.

Accounts Payable	$ 1,100
Anil, Drawing	$2,750
Accounts Receivable	$10,400
Prepaid Insurance	$880
Advertising Expense	$150
Rent Expense	$640
Cash	$6,800
Salaries Expense	$3,200
Service Fees	$16,200
Supplies Expense	$2,250
Insurance Expense	$80
Supplies on Hand	$8,420
Anil, Capital, January 1	$18,500
Utilities Expense	$230

REQUIRED

(a) Prepare a trial balance in good form from the given data.
(b) Prepare an Income statement for the month of January.
(c) Prepare a balance sheet at January 31.

Answer 1

Answer

• Requirement [a]

Trial Balance
for the month ended Jan 31
	Debit	Credit
Cash	$6,800
Accounts Receivable	$10,400
Supplies on Hand	$8,420
Prepaid Insurance	$880
Accounts Payable		$1,100
Anil, Capital, January 1		$18,500
Anil, Drawing	$2,750
Service Fees		$16,200
Advertising Expense	$150
Rent Expense	$640
Salaries Expense	$3,200
Supplies Expense	$2,250
Insurance Expense	$80
Utilities Expense	$230
TOTAL	$35,800	$35,800

• Requirement [b]

Income Statement
for the month ended Jan 31
Revenues:
Service Fees		$16,200
Expenses:
Advertising Expense	$150
Rent Expense	$640
Salaries Expense	$3,200
Supplies Expense	$2,250
Insurance Expense	$80
Utilities Expense	$230
Total expenses		$6,550
Net Income		$9,650

• Rewquirement [c]

Balance Sheet
at 31 Jan
ASSETs
Cash	$6,800
Accounts Receivable	$10,400
Supplies on Hand	$8,420
Prepaid Insurance	$880
Total Assets		$26,500
LIABILITIES
Accounts Payable		$1,100
OWNER's EQUITY
Anil, Capial 31 Jan [$ 18500 + 9650 net income - $ 2750 drawings]		$25,400
Total Liabilities & Equity		$26,500