Question

Transactions; Financial Statements

On July 1, 2019, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July:

1. Opened a business bank account with a deposit of $27,000 from personal funds.
2. Purchased office supplies on account, $2,750.
3. Paid creditor on account, $1,740.
4. Earned sales commissions, receiving cash, $28,080.
5. Paid rent on office and equipment for the month, $5,500.
6. Withdrew cash for personal use, $9,000.
7. Paid automobile expenses (including rental charge) for the month, $2,640, and miscellaneous expenses, $1,260.
8. Paid office salaries, $3,310.
9. Determined that the cost of supplies on hand was $930; therefore, the cost of supplies used was $1,820.

Required:

1. Indicate the effect of each transaction and the balances after each transaction. For those boxes in which no entry is required, leave the box blank. If required, enter negative values as negative numbers.

Assets

=

Liabilities +

Owner's Equity

Cash

+

Supplies

=

Accounts Payable

+

Pat Glenn, Capital

-

Pat Glenn, Drawing

+

Sales Commissions

-

Rent Expense

-

Office Salaries Expense

-

Auto Expense

-

Supplies Expense

-

Miscellaneous Expense

a.

b.

Bal.

c.

Bal.

d.

Bal.

e.

Bal.

f.

Bal.

g.

Bal.

h.

Bal.

i.

Bal.

2. Prepare an income statement for July.

Half Moon Realty
Income Statement
For the Month Ended July 31, 2019
		$
Expenses:
	$
Total expenses
		$

3. Prepare a statement of owner's equity for July. If an amount is zero, enter "0".

Half Moon Realty
Statement of Owner's Equity
For the Month Ended July 31, 2019
		$
	$
		$

3. Prepare a balance sheet as of July 31.

Half Moon Realty
Balance Sheet
July 31, 2019
Assets
	$
Total assets	$
Liabilities
	$
Owner's Equity
Total liabilities and owner's equity	$

Answer 1

Assets Liabilities + Accounts Pat Glenn, Pat Glenn, Sales Uwner's Equity Office Rent Salaries Expense Expense Auto Supplies Miscellaneous Cash + Supplies Payable Drawing Commissions Expensel Expense Expense Capital $27,000 - $27,000 + + $2.750 + $2,750 $27,000 + $2,750 + $2,750 + ($1,740) + $1,010 + + Bal $2,750 $27,000 + + Bal. $28,080 $28,080 $2,750 $1,010 + $27,000 + le + + $5,500 $5,500 $2,750 $1,010 + $27,000 + $28,080 - $27,000 + ($1,740) + $25,260 + $28,080 + $53,340 + ($5,500) + $47,840 + ($9,000) + $38,840 + ($3,900) + $34,940 + ($3,310) + $31,630 + + $31,630 + + + $9,000 $9,000 $2,750 = $1,010 + $27,000 + $28,080 $5,500 + + $2,640 $2,640 $2,750 $1,010 $27,000 - $9,000 $1,260 $1,260 $5,500 $28,080 - + h. + Bal. $3,310 - $3,310 - $1,010 $27,000 - $9,000 + $28,080 - $5,500 - $2,640 $1,260 $2,750 ($1,820) = $930 = + $1,820 $1,820 - Bal. $1,010 + $27,000 - $9,000 + $28.080 - $5,500 - $3,310 - $2,640 - $1,260 Half Moon Realty Half Moon Realty Income Statement Statement of Owner's Equity For the Month Ended July 31, 2019 For the Month Ended July 31, 2019 Sales Commissions $28,080 Nancy Townes, Capital $27,000 Expenses: Net Income $13,550 Rent Expense $5,500 $40,550 Office Salaries Expense $3,310 Nancy Townes, Drawing $9,000 Auto Expense $2,640 Corona Capital 12/31/18 $31,550 Supplies Expense $1,820 Miscellaneous Expense $1,260 Total expenses $14,530 Net Income $13,550 Half Moon Realty Balance Sheet July 31, 2019 Assets Cash Supplies Total assets Liabilities Accounts Payable Owner's Equity Owner's Equity Total liabilities and owner's equity $31,630 $930 $32,560 $1,010 $31,550 $32,560