Question

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E2-2 Yard Professionals Inc, experienced the following events in 2018. its first year of operation: 1. Performed services for $35.000 cash. 2. Purchased $6.000 of supplies on account 3. A physical count on December 31, 2018. found that there was $1.800 of supplies on hand. Based on this information alone: a. Record the events under an accounting equation Event Assets Liabilies Stockholders' Acct. Titles for RE Cash Supplies Accounts Payable Equity Retained Earnings 1. Provide service 2. Purchased supplies 3. Used supplies Balance 12/31/2018 b. Prepare an income statement, balance sheet, and statement of cash flows for the 2018 accounting period. Yard Professionals, Inc. Income Statement For the Year Ended December 31, 2018

Answer 1

	Event		Assets		=	liabilties	+	Equity
			cash	Supplies	=	A/P	+	RE
1	provided service		35,000	0		0		35,000
2	purchased supplies		0	6,000		6,000		0
3	used supplies		0	-4,200		0		-4,200
	Totals		35,000	1800		6000		30,800
b)	Income statement
	Revenue		35,000
	expense		4,200
	Net income		30,800
c)	Balance sheet
	Assets
	cash				35,000
	Supplies				1800
	Total assets					36,800
	Liabilities
	Accounts payable				6000
	Total liabilities					6000
	Stockholder's Equity
	Retained earnings				30,800
	Total stockholder's Equity					30,800
	Total liabilities & stockholder's Equity					36800
	Statement of cash flow
	Cash flows from operating activities
	cash received from customers				35,000
	Cash paid for operating expense				0
	Nrt cash flow from operating activities					35,000
	Cash flow from investing activities					0
	cash flow from financing activities					0
	net change in cash					35,000
	cash at the beginning of the year					0
	Ending cash balance					35,000
c)	supplies		1800
d)	Supplies expense		0