Question

Yard Professionals Inc, experienced the following events in 2018, its first year of operation: 1. Performed counseling services for $29,500 cash. 2. Purchased $7,600 of supplies on account. 3. A physical count on December 31, 2018, found that there was $1,530 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?

Answer 1

a.

Assets Event Cash Supplies - payable Stockholders' Liabilities + equity Accounts Retained earnigns $ 29,500 $7,600 = 1 $ 7,600+ $6,070 = -$6,070 $1,530 = $ 7,600 + $ 23,430 $ 29,500 Totals $ 29,500 Note for 3 transaction = 7,600-1,530 = 6,070

b.

Income statement Service revenue Less: Supplies expense Net income 29,500 -6,070 23,430 Balance sheet Assets: Current assets: Cash Supplies 29,500 1,530 31,030 Total assets Liabilities: Current liabilities: Accounts payable Total liabilities Stockholders' equity: Retained earnings 7,600 7.600 23,430 Total stockholders' equity Total liabilities and stockholders' equityl 23,430 31.030

Statement of cash flows Cash flow from operating activities: Cash collection from customers 26,500 26,500 Net cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Net change in cash Beginning cash balance Ending cash balance 26,500 26,500 C. Supplies = 1,510 d. Supplies expense = 0