Question

Mr. Short is a former firefighter who now conducts safety seminars for local business and other organizations. At the end of February 2020, the accounting system showed the following balances: Account Title Cash Office Supplies Pre-paid Insurance Truck Office Equipment Accounts Payable Jimmy Short, Capital Jimmy Short, Withdrawals Safety Services Revenue Salaries Expense Repairs Expense $12,620 6,720 8,360 92,000 30,400 3,360 98,400 10,640 74,880 12,540 3,360 The amount in Jimmy Short Capital is the result of Mr. Short transferring his equipment truck and some cash to the business. (treat the amount as investment by owner) Required: Prepare financial statements for the business for the month ended February 2020. Income statement Statement of changes in owner's equity Balance sheet . .

Answer 1

Ans. 1	Income Statement
	For the Month Ended February 2020
	Particulars	Amount	Amount
	Safety services revenue	$74,880
	Total revenue (a)		$74,880
	Less: Expesnes:
	Salaries expenses	$12,540
	Repairs expense	$3,360
	Total expenses (b)		$15,900
	Net lncome (a - b)		$58,980
Ans. 2	Statement of Changes in Owner's Equity
	For the Month Ended February 2020
	Particulars	Amount
	Beginning balance of Jimmy Short, capital	$98,400
	Add: Net income	$58,980
	Less: Jimmy Short, withdrawals	-$10,640
	Ending balance of Jimmy Short, capital	$146,740
Ans. 3	Balance Sheet
	For the Month Ended February 2020
	Assets
	Current assets :
	Cash	$12,620
	Office supplies	$6,720
	Prepaid insurance	$8,360
	Total current assets		$27,700
	Property, plant and equipment:
	Truck	$92,000
	Office equipment	$30,400
	Total property, plant and equipment		$122,400
	Total Assets		$150,100
	Liabilities and Stockholder's Equity:
	Liabilities :
	Accounts payable	$3,360
	Total Liabilities		$3,360
	Stockholder's equity:
	Contributed capital (ending)	$146,740
	Total Stockholder's Equity		$146,740
	Total Liabilities and Stockholder's Equity		$150,100