Question

Al Shelton recently opened is own accounting firm on April 1, which he operates as a corporation. The name of the new entity
ASSETS LIAB. EQUITY Contr. Сар. Retained Earnings Cash + AIR + Office + Furn AP + Com Div. + Service Rent Util. Sup Stock Rev


Apr. 5 Shelton deposited $65,000 in a new business bank account titled Al Shelton, CPA. The business issued common stock to S
i Requirements tieg a V CA Re 1. Analyze the effects of the events on the accounting equation of Al Shelton, СРА. 2. Prepare
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Answer #1

Al Shelton

Answer 1

Assets

=

Liabilities

+

Equity

Contributed Capital

+

Retained Earnings

Date

Cash

+

A/R

+

Office

+

Furniture

=

A/P

+

Com. Stock.

-

Div.

+

Service Rev.

-

Rent Exp.

-

Util Exp.

05-Apr

$65,000

+

+

+

=

+

$65,000

-

+

-

-

06-Apr

-$350

+

+

+

=

+

-

+

-

-

$350

07-Apr

+

+

+

$6,000

=

$6,000

+

-

+

-

-

10-Apr

$3,300

+

+

+

=

+

-

+

$3,300

-

-

11-Apr

-$150

+

+

+

=

+

-

+

-

-

$150

12-Apr

+

$18,000

+

+

=

+

-

+

$18,000

-

-

18-Apr

-$800

+

+

+

=

+

-

+

-

$800

-

25-Apr

$18,000

+

-$18,000

+

+

=

+

-

+

-

-

27-Apr

-$6,000

+

+

+

=

-$6,000

+

-

+

-

-

30-Apr

-$3,000

+

+

+

=

+

-

$3,000

+

-

-

Balance

$76,000

+

$0

+

$0

+

$6,000

=

$0

+

$65,000

$3,000

$21,300

$800

$500

Sub Total

$65,000

$17,000

Grand Total

$82,000

=

$82,000

Answer 2 a

Income Statement

Amount $

Service Revenue

$21,300

Total Revenue

$21,300

Less: Expenses

Rent Expense

$800

Utilities Expense

$500

Total Expenses

$1,300

Net Income

$20,000

Answer 2 b

Statement of Retained Earnings

Amount $

Opening Retained Earnings

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