Question

chapter 1 accouting

800 Rere LP L03, S50 J. Wadden, Withdrawals Jim Trickett, a retired army officer, opened Trickett's Catering Service. As his accountant, analyze the transactions listed and present them in proper form. d. The analysis of the transactions by using the expanded accounting equation. b. A balance sheet showing the financial position of the firm before opening on October 31, 201X. c An income statement for the month of November. d. A statement of owner's equity for November. e. A balance sheet as of November 30, 201X. 201X Oct. 25 Jim Trickett invested $22,000 in the catering business from his personal savings account. 27 Bought equipment for cash from Codair Co., $700. 28 Bought additional equipment on account from Keegan Co., $2,100. 29 Paid $800 to Keegan Co. as partial payment of the October 28 transaction (You should now prepare your balance sheet as of October 31, 201X. Nov. 1 Catered a graduation and collected cash, $2,000. 5 Paid salaries of employees, $1,500. 8 Prepared desserts for customers on account, $150. 10 Received $100 cash as partial payment of November 8 transaction. 15 Paid telephone bill, $50.

Answer 1

Accounting Equation = Assets = Liabilities + Shareholder's equity

In case of Expanded accounting equation, Assets= Cash + Receivables + Equipment + Other assets

Liabilities = Expenses Payables + Supplier payables

Shareholder's equity = Capital + Retained earnings - Drawings

Please go through the following attachments for solution.

+ Date Cash - Supplies Exp. 22000 -700 -800 2000 -1500 Oct-25 Oct-27 Oct-28 Oct-29 Nov-01 Nov-05 Nov-08 Nov-10 Nov-15 Nov-17 Nov-20 Nov-25 Nov-28 Nov-30 Total 1. Analysis of effect on expanded accounting equation Assets = Liabilities Shareholders Equity Accounts + Rent + Owner + Retained Equipment Suppliers Payable Payable Capital Revenue - Salaries - Telephone - Rent 22000 700 2100 2100 -800 2000 - 1500 150 150 -100 -50 -400 1000 400 400 550 100 -50 -400 1000 -550 -250 21400 -250 -250 50 3200 1700 550 21600 3150 -1500 -50 -550

b) Statement of financial position as on October 31 Assets Amount Liabilities and Shareholders equity Amount Cash 20500 Supplier - keegan Co., 1300 (22,000-700-800=20500) (2100-800=1300) Equipment 2800 Equity 22000 (700+2100=2800) Total 23300 23300 c) Income statement for the month of November Particulars Amount Revenue 3150 Less: Expenses Salaries Expense 1500 Telephone Expense 50 Rent Expense 550 Supplies Expense 250 Net Income 800 d) Statement of Owner's Equity Particulars Amount Balance as at 31 October 22000 Add: Net Income Less: Drawings 400 Balance as at 30 November 22400 800 e) Statement of financial position as on November 30 Assets Amount Liabilities and Shareholders equity Amount Cash 21400 Supplier - keegan Co., 1300 (20500+2000-1500+100-50- 400+1000-250) Supplier -Equipment purchase 400 Accounts Receivable 50 Rent Payable 550 ( 150-100=50) Equipment 3200 Equity 22400 (2800+400=3200) Total 24650 24650 Note: Do not enter the amounts indicated in brackets in your sheet. It is only for your clarification.