Question

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Problem 3.5A Preparing financial statements from T accounts. LO 3-3, 3-5, 3-6 The accountant for the firm owned by Randy Guttery prepares financial statements at the end of each month. The following transactions for Randy Guttery, Landscape Consultant took place during the month ended June 30, 2019. Transactions: a. Guttery invested $143,000 in cash to start the business. b. Paid $4,300 for the current month's rent. c. Bought office furniture for $15,020 in cash. d. Performed services for $8,900 in cash. e. Paid $1,080 for the monthly telephone bill. f. Performed services for $14,700 on credit. g. Purchased a computer and copier for $34,600; paid $11,300 in cash inediately with the balance due in 30 days. h. Received $7,350 from credit clients. 1. Paid $2,300 in cash for office cleaning services for the month. j. Purchased additional office chairs for $4,100, received credit terms of 30 days. k. Purchased office equipment for $23,000 and paid half of this amount in cash immediately, the balance is due in 30 days. 1. Issued a check for $7,700 to pay salaries. m. Performed services for $15,200 in cash. n. Performed services for $16,700 on credit. o. Collected $6,300 on accounts receivable from charge customers. p. Issued a check for $2,050 in partial payment of the amount owed for office chairs. q. Paid $530 to a duplicating company for photocopy work performed during the month. r. Paid $1,050 for the monthly electric bill. s. Guttery withdrew $7,300 in cash for personal expenses. Required: Prepare a trial balance, an income statement, a statement of owner's equity, and a balance sheet. Assume that the transactions too place during the month ended June 30, 2019. Determine the account balances before you start work on the financial statements Analyze: What is the change in owner's equity for the month of June?

Answer 1

Randy Guttery, Landscape Consultant Journal entries Date Account Cash Randy Guttery, Capital Debit $ 143,000 $ 143,000 b $ 4,300 Rent expense Cash $ 4,300 $ 15,020 Office Furniture Cash $ 15,020 $ 8,900 Cash Fees Income $ 8,900 $ 1,080 Telephone expense Cash $ 1,080 f $ 14,700 Accounts Receivable Fees Income $ 14,700 $ 34,600 Office Equipment Cash Accounts Payable $ 11,300 $ 23,300 $ 7,350 Cash Accounts Receivable $ 7,350 $ 2,300 Office cleaning expense Cash $ 2,300 $ 4,100 Office Furniture Accounts Payable $ 4,100 $ 23,000 Office Equipment Cash Accounts Payable $ 11,500 $ 11,500 $ 7,700 Salaries expense Cash $ 7,700 m $ 15,200 Cash Fees Income $ 15,200 $ 16,700 Accounts Receivable Fees Income $ 16,700 $ 6,300 Cash Accounts Receivable $ 6,300 $ 2,050 Accounts Payable Cash $ 2,050 $ 530 Photocopy expense Cash $ 530 $ 1,050 Utilities expense Cash $ 1,050 S $ 7,300 Randy Guttery, Drawing Cash $ 7,300

Date Date Credit Date Credit Debit Date Credit Accounts Receivable $ 14,700 1 h $ (7,350) $ 16,700 0 $ (6,300) Debit Date Office Equipment $ 34,600 $ 23,000 Debit Date Office Furniture $ 15,020 $ 4,100 f d k Randy Guttery, Landscape Consultant T Accounts Date Debit Date Credit Cash a $ 143,000 b $ (4,300) $ 8,900 $(15,020) h $ 7,350 $ (1,080) m $ 15,200 $(11,300) O $ 6,300 $ (2,300) k $(11,500) $ (7,700) $ (2,050) $ (530) $ (1,050) $ (7,300) 5 Bal. Bal. Bal. Bal. $116,620 Accounts Payable 8 $ 17,750 Randy Guttery, Capital $143,000 $57,600 Randy Guttery, Drawing $ 7,300 $ 19,120 Fees Income S $ 23,300 $ 4,100 $ 11,500 f $ 8,900 $ 14,700 $ 15,200 $ 16,700 p $ (2,050) k $ 36,850 $143,000 Bal. $ 55,500 Bal. Salaries expense $ 7,700 Rent expense $ 4,300 $ 7,300 Telephone expense $ 1,080 b Bal. Bal. Bal. bal. $ 7,700 Office cleaning expense $ 2,300 $ 4,300 Utilities expense $ 1,050 $ 1,080 Photocopy expense $ 530 q Bal. $ 2,300 Bal. $ 1,050 al. $ 530

Randy Guttery, Landscape Consultant Account Names Cash Accounts Receivable Office Equipment Office Furniture Accounts Payable Randy Guttery, Capital Randy Guttery, Drawing Fees Income Salaries expense Rent expense Telephone expense Office cleaning expense Utilities expense Photocopy expense Totals Trial Balance Debit Credit 116,620 17,750 57,600 19,120 36,850 143,000 7,300 55,500 7,700 4,300 1,080 2,300 1,050 530 235,350 235,350

55,500 Randy Guttery, Landscape Consultant Income Statement For the Month Ended June 30, 2019 Revenues Fees Income Expenses Salaries expense Rent expense Telephone expense Office cleaning expense Utilities expense Photocopy expense Total expenses Net Income 7,700 4,300 1,080 2,300 1,050 530 16,960 38,540 143,000 Statement of Owners Equity For the Month Ended June 30, 2019 Randy Guttery, Capital, June 1, 2019 Net Income for June Less: Withdrawals for June Increase in Capital Randy Guttery, Capital, June 30, 2019 38,540 (7,300) 31,240 174,240

Randy Guttery, Landscape Consultant Balance Sheet As of June 30, 2019 Assets Current Assets Cash Accounts Receivable Total Current Assets Liabilities & Owners Equity Current Liabilities 116,620 Accounts Payable 17,750 134,370 Total Current Liabilities 36,850 36,850 174,240 Fixed Assets Office Equipment Office Furniture Total Fixed Assets Owners Equity 57,600 Randy Guttery, Capital 19,120 76,720 Total Assets 211,090 Total Liabilities & Owners Equity 211,090 Analyze Change in Owners Equity 31,240