Question

Required information

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Liu Zhang operates Lawson Consulting, which began operations on June 1. On June 30, the company’s records show the following accounts and amounts for the month of June.

Cash	$	9,500		Service revenue	$	14,700
Accounts receivable		5,400		Equipment		7,400
Accounts payable		4,400		Rent expense		2,900
L. Zhang, Withdrawals		2,400		Wages expense		8,000

Use the above information to prepare a June 30 balance sheet for Lawson Consulting. Hint: Compute the owner’s capital account balance as of June 30.

Answer 1

Income Statement
Service revenue		14,700
Less: Operating expense
Rent expense		2,900
Wages expense		8,000
Net Income		3,800
Statement of Owner's equity as at June 30:
Beginning balance of capital		16,500
Add: Net Income			3,800
Sub total				20,300
Less: Withdrawals			-2,400
Ending balance of Capital as at June 30	17,900
Answer is $ 17,900
Note:
Computation of Beginning capital balance:
Trial Balance
			Debit $	Credit$
Cash			9,500
Accounts receivable		5,400
Equipment		7,400
Accounts payable			4,400
L. Zhang Capital (balancing figure)	16500
L. Zhang withdrawals		2,400
Service revenue			14,700
Rent expenses		2,900
Wages expense		8,000
TOTAL			35,600	35,600