Question

Yard Professionals Inc. experienced the following events in 2018, its first year of operation: 1. Performed counseling services for $19,500 cash. 2. Purchased $6,600 of supplies on account. 3. A physical count on December 31, 2018, found that there was $1,280 of supplies on hand. Required Based on this information alone: a. Record the events under an accounting equation. b. Prepare an income statement, balance sheet, and statement of cash flows for the 2018 accounting period. c. What is the balance in the Supplies account as of January 1, 2019? d. What is the balance in the Supplies Expense account as of January 1, 2019? Complete this question by entering your answers in the tabs below. ReqA Req B1 Inc Stmt Req B2 Bal Sheet Req B3 CF Stmt Reqs C and D Record the events under an accounting equation. (Enter any decreases to account balances with a minus sign.) YARD PROFESSIONALS INC. Effect of Events on the Accounting Equation Stockholders' Assets - Liabilities Equity Event Accounts Retained Cash Supplies - Payable Earnings Performed counseling services 2. Purchased supplies 3. Used supplies Totals

Answer 1

Solution a:

YARD PROFESSIONALS INC.
Effect of Events on the Accounting Equation
Event		Assets		=	Liabilities	+	Stockholders’ Equity
		Cash	Supplies	=	Accounts Payable	+	Retained Earnings
1	Performed Counselling services	19500		=		+	19500
2	Purchase Supplies		6600	=	6600	+
3	Used Supplies (6600-1280)		-5320	=		+	-5320
Totals		19500	1280	=	6600	+	14180

Solution b:

YARD PROFESSIONALS INC.
Income Statement
For the year ended Dec 31, 2018
Service Revenue	19500
Less: Supplies expense	5,320
Net Income	14,180
YARD PROFESSIONALS INC.
Balance sheet
As of Dec 31, 2018
ASSETS:
Cash	19,500
Supplies	1,280
Total Assets		20,780
LIABILITIES:
Accounts Payable	6,600
Total Liabilities		6,600
Stockholders' Equity:
Retained Earnings	14,180
Total Stockholders' Equity		14,180
Total Liabilities and stockholders' Equity		20,780
YARD PROFESSIONALS INC.
Statement of Cash Flows
For the year ended Dec 31, 2018
Cash From Operating Activities:
Service Revenue	19500
Net Cash flow from Operating Activities		19500
Net Cash from Investing Activities		0
Net Cash from Financing Activities		0
Net Change in cash		19500
Beginning cash balance		0
Ending Cash Balance		19500

Solution c and d:

c.	Supplies	1280
d.	Supplies Expense	5320