Question

Littlechild started a new kitchen and bath design business called Littlechild Enterprises. The following activities occurred during its first month of operations, March 2017 a. Littlechild invested $225,000 cash and office equipment valued at $33,000 in the business b. Purchased a small building for $730,000 to be used as an office. Paid $165,000 in cash and signed a note payable promising to pay the balance over several years. c. Purchased $4,300 of office supplies for cash. d. Purchased $85,000 of office equipment on credit e. Littlechild made reservations at a hotel hosting a kitchen and bath design conference in August 2017. He will send a $2,300 deposit on July 1, 2017 f. Completed a project on credit and billed the client $6,500 for the work. g. Paid a local online newspaper $4,800 for an announcement that the office had opened. h. Completed a project for a client and collected $5,300 cash. i. Made a $5,300 payment on the equipment purchased in (d) j. Received $3,150 from the client described in (f) k. Paid $9,600 cash for the office secretary's wages I. Littlechild withdrew $4,900 cash from the company bank account to pay personal living expenses Required 1.& 2. Complete the following table. Use additions and subtractions to show the transactions' effects on the elements of the equation. For each change in equity, state whether the change was caused by an investment, a revenue, an expense, or a withdrawal. Determine the tfinal transaction/event, select "No Entry Required" in the equity transaction field.) ach item and verify that the equation is in balance. (Enter all amounts as positive values. If no entry is required for a

Answer 1

Prepare an Statement of Changes in Equity LITTLECHILD ENTERPRISES Statement of Changes in Equity For the Month Ended March 31, 2017 George Littlechild Capital, March 1 Add: Investment during the vear $ 258,000 $ 258,000 Total 4,900 $2,600 Less: Withdrawn by owner Loss George Littlechild Capital, March 31 250,500 Prepare a Balance Sheet LITTLECHILD ENTERPRISES Balance Sheet March 31, 2017 ASSETS LIABILITIES Cash Accounts Receivable Office Supplies Office Equipments Buildin $ 39,550 Accounts Payable S3,350 Notes Payable $79,700 $565,000 $ 644,700 $ 4,300 Total Liabilities $ 118,000 $ 730,000 EQUITY George Littlechild capital S 250,500 Total Assets 895,200 Total Liabilities & Equity 895,200 Assets result from a combination of debt and equity financing (A=L+E), littlechild Enterprises total assets of resulted from incurring 895,200 S 644,700 in liabilities $ 644,700$ 895,200 x 100 721 %