Question

DKAM UUR NEIGHBOR'S PAPER) - in the columns below, indicate whether each transaction caused an an increase ), or no change (NC) in assets, liabilities, and owner's equity. (20%) Transaction Liabilities ), a decrease 1. Investment by owner 2. Paid cash on account Assets Owner's Equity 3. Purchase office Supplies on Account 4. Collection of accounts receivable 5. Withdrawal of cash by owner 6. Billed customers for services performed 7. Paid rent expense 8. Paid cash on accounts payable 9. Purchased equipment; signed a note payable 10. Borrowed money from the bank 2. Use the following accounts and information to prepare, in good form, an income statement. statement of owner's equity, and balance sheet for Talbot Industries for the month ended July 31, 2017. (45%) Accounts Payable Accounts Receivable Buildings Cash Commissions Earned Andreas Talbot, Capital, July 1, 2017 $ 3,100 1,400 22,000 15,600 22,700 $ 8,000 Andreas Talbot, Withdrawals Insurance Expense Land Notes Payable Rent Expense Salaries Expense 2,200 77,900 45,000 3,300 2,400 10,000 Supplies 400

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Answer 1

a.

Transaction	Asset	Liability	Owners Equity	Comments
1. Investment by owner	Increase	NC	Increase	Introduction of additional capital will result introduction of more cash or assets.
2. Paid cash on account	Decrease	Decrease	NC	Will result in decraese in cash and bank balance along with reduction in liabilities payable
3. Purchase office supplies on account	Increase	Increase	NC	Will result in increase of assets aloing with corresonding payable entry in the liabilities'
4. Collection of accounts receivable	NC	NC	NC	Increase in cash along with reduction in receivables thereby leaving no impact in the asset side on the whole
5. Withdrawal of cash by owner	Decrease	NC	Decrease	Reduction in cash balance along with oeners equity
6. Billed customers for services performed'	Increase'	NC	Increase'	Income item whill will ultimately incraese cash or recivable balance
7. Paid rent expenses	Decrease	NC	Decrease	Income item which will reduce cash balance and will impact profits
8. Paid cash on accounts payable	Decrease	Decrease	NC	Will result in decraese in cash and bank balance along with reduction in liabilities payable
9. Purchased equipment, signed a note payable	Increase	Increase	NC	Will result in increase of assets aloing with corresonding payable entry in the liabilities'
10. Borrowed money from the bank	Increase	Increase	NC	Will result in increase of assets aloing with corresonding payable entry in the liabilities'

b.

Income Statement
Income
Commissions Earned	22,700
Expenses
Salaries	10,000
Rent	2,400
Insurance	2,200
Profits/ (Losses)	8,100
Statement of Owner's Equity
Opening	77,900
Add: Profits	8,100
Less: Drawings	8,000
Closing Capital	78,000
Balance Sheet
Assets
Land	45,000
Buildings	22,000
Accounts receivable	1,400
Supplies	400
Cash	15,600
Total Assets	84,400
Liabilities
Accounts payable	3,100
Notes Payable	3,300
Total Liabilities	6,400
Owners Equity	78,000
Total Equity and Liability	84,400