Question

Event Analysis Project Instructions: 1. Write out the accounts that would be used to capture the event out to the right of the event description 2. Completing the table below by placing only the amounts from the events in the proper columns 3. After completing the table total up the columns and indicate what the profit (ons) amount is as well as the amounts for the accounting equation (make sure it balancos). Events: a. Issued (sold) capital stock to the owners, $ 12,000, b. Borrowed from the bank, $13,000 c. Purchased equipment using cash for $1,700. d. Pald the rent for one year in advance $6,000. e. Performed services for a client in the amount of $1,200, sending them an invoice. f. Received but did not yet pay the telephone bill of $120. g. Hired a new employee, to be paid $8 per hour. h. Paid the telephone bill in f. above. 1. Employee in g. above has worked 20 hours this week, will be paid at the end of next week. J. Collected $800 of the $1,200 billed to customer in e. above. k. Issued and paid a dividend of $200 to the owners. I. Made a payment on the loan to the bank from (b.) above. The note is for monthly payments of $600 at a 6% APR rate. Remember, you pay interest on the amount borrowed! Round results up to the nearest dollar

Answer 1

Requirement (1): Accounts that would be used to capture the events:

(a) Cash account and Owners Equity account
(b) Cash account and Bank Borrowing account
(c) Cash account and Equipment account
(d) Cash account and Pre-paid Rent account
(e) Accounts Receivable account and Services Revenue account
(f) Telephone Expense account and Accrued Telephone Expense account
(g) No entry
(h) Cash account and Accrued Telephone Expense
(i) Salary Expense account and Accrued Salary Expense account
(j) Cash account and Accounts Receivable account
(k) Cash account and Dividend account
(l) Cash account, Interest expense account and Bank Borrowing account

Requirement (2): Completion of table:

			Owners Equity
			Retained Earnings			Capital Stock
Event	Assets	Liabilities	Revenue	(Expense)	(Dividend)
(a)	12000					12000
(b)	13000	13000
(c )	-1700
(c )	1700
(d)	-6000
(d)	6000
(e)	1200		1200
(f)		120		-120
(g)
(h)	-120	-120
(i)		160		-160
(j)	800
(j)	-800
(k)	-200				-200
(l)	-600	-535		-65
Totals	25280	12625	1200	-345	-200	12000
Profit (Loss) is		855
The accounting Equation is			Assets = Liabilities + Owners Equity
Assets	25280
Liabilities	12625
Owners Equity	12655
Therefore, Equation is			25280 = 12625 + 12655