Question

Question 8 (50 points) Global Filter Corp. began operations on June 1, 2014. The transactions for the first month follow a. Global Filter Corp. issued shares to shareholders for $85,000. b. Furniture was rented by a customer for $1,300 cash. c. Global Filter Corp. performed consulting services for a customer and received $6,500. d. Global Filter Corp. will pay this month's untios bill of $400 received today, within 30 days. e. Global Filter Corp. collected $800 for commissions eamed today f. Global Filter Corp. paid a $1.250 bill received today for an advertising campaign that ran last week 9. Global Filter Corp. will pay the $1,500 advertising bill received today within 30 days. h. Global Filter Corp. collected $1,800 for commissions earned today. 1. Office salaries for the month were paid today: $4,750. J. Global Filter Corp. paid dividends of $1,100 to the shareholders. Fill out the following table, according to the transactions above. Select the headings for each column by clicking on the appropriate cell. Also indicate next to each change in equity in the explanation column) whether it was caused by issuance of share capital investment), a revenue, an expense or payment of dividends. Identify revenues and expenses by name. Calculate th total balance for each column (noor - sign is required for totals) In addition to this, prepare an income statement, a statement of changes in equity and a balance sheet for the month ended June 30 a) Complete the following accounting equation table: Equity Explanation +Share Capital Retained Earnings Tee3638&@ b) Complete the following income statement: Income Statement sectonel MacBook Pro Search or type URL

Answer 1

a)

	Assets	=	Liabilities	+	Equity			Explanation
	Cash	=	Accounts Payable	+	Share Capital	+	Retained Earnings
a	$      85,000				$           85,000			Share Capital issued for cash
b	$       -1,300						$                     -1,300	Furniture rent(expense) paid, thus retained earnings decreased
c	$        6,500						$                       6,500	service revenue received
d	$               -		$                         400				$                         -400	Utilities expense incurred but not paid today
e	$            800						$                          800	Commission income received
f	$       -1,250						$                     -1,250	Advertising expense paid
g	$               -		$                      1,500				$                     -1,500	Advertising expense incurred but not paid today
h	$        1,800						$                       1,800	Commission income received
i	$       -4,750						$                     -4,750	Office salaries expense paid
j	$       -1,100						$                     -1,100	Dividend paid to Share holders
	$      85,700	#	$                      1,900	#	$           85,000	#	$                     -1,200

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b)

Global Filter Corp.
Income Statement
For the month ended June 30
Service Income	$            6,500
Commission Income	$            2,600
Total Income	$            9,100
Rent Expense	$           -1,300
Utilities Expense	$              -400
Advertising Expense	$           -2,750
Office Salaries Expense	$           -4,750
Net Loss	$              -100

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c)

Global Filter Corp.
Statement of Changes in Equity
For the month ended June 30
	Share Capital	Retained earnings	Total Equity
Shares Issued	$          85,000	$                                   -	$          85,000
Net Loss	$                   -	$                              -100
Dividend Paid	$                   -	$                          -1,100
	$          85,000	$                          -1,200	$          83,800

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d)

Global Filter Corp.
Balance Sheet
As at June 30, 2014
Assets		Liabilities& Share Holders Equity
Cash	$          85,700	Accounts Payable	$            1,900
		Share Holders Equity
		Share Capital	$          85,000
		Retained Earnings	$           -1,200
Total Assets	$          85,700	Total Liabilities& Share Holders Equity	$          85,700

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