Question

The following T accounts show transactions that were recorded by Residential Relocators, a firm that specializes in local housing rentals. Cash 171.eee 11.ee Equipment 61, eee Accounts Receivable 11,8ee (8) (a (b) (c) (f) 1.lee 27,000 51e 9,100 3,100 Accounts Payable Wade Wilson, Capital Supplies 27,eee 61,000 (b) 171. Bee Fees Income Telephone Expense 51e 11,000 11,800 Wade Wilson, Drawing 3,100 (i) (f) Salaries Expense 9,1ee (h) Required: Prepare a statement of owner's equity and a balance sheet for Residential Relocators as of December 31, 2019,

Answer 1

1) RESIDENTIAL RELOCATORS NOTE: Statement of Owner's Equity For the Month Ended December 31, 2019 When a firm earns net income, it will increase $171,000 Wade Wilson, Capital - Beginning balance owner's capital. Similarly, when owner withdraws $13,190 Add: Net Income for December [Ref: Workings] cash from firm, owner's capital will decrease. So, net increase or decrease in owner's capital for the month is calculated and added to beginning balance -$3,100 Less: Withdrawal for December Increase in capital $10,090 $181,090 Wade Wilson, Capital - Ending balance of owner's capital on the statement of owner's equity. It should be noted as there is no additional capital contributed by owner during the month, it is not Workings: RESIDENTIAL RELOCATORS Income Statement appearing on statement of owner's equity. If owner has contributed capital during the month, it should For the Month Ended December 31, 2019 have been reported as an increase in owner's equity Revenues: $22,800 [$11000 + $11800] on statement of owner's equity. Fees Income Expenses: $510 Telephone Expense Salaries Expense $9,100 Total Expenses $9,610 $13,190 [$22800 - $9610] Net Income

2) RESIDENTIAL RELOCATORS Balance Sheet December 31, 2019 Liabilities Assets Accounts Payable $143,390 $10,700 $27,000 $181,090 $61,000 $61,000 Cash Accounts Receivable Leave this row blank Blank Supplies Shareholders' Equity Total Current Assets Wade Wilson, Capital $181,090 [Ref: Statemet of Owner's Equity] Equipment Leave this row blank Blank Leave this row blank Blank $242,090 $242,090 Total Assets Total Liabilities & Owners' equity Workings: Cash Accounts Receivable $11,800 $171,000 $11,000 $1,100 $27,000 $510 $1,100 a) b) f) g) d) e) h) $9,100 g) $3,100 i) $10,700 ($11800 - $1100 = $10700) $143,390 End. Bal. End. Bal. ($171000 + $11000 + $1100 - $27000 - $510 - $9100 - $3100 = $143390)