Question

The accounting records of LeClaire Delivery Services show the following assets and liabilities as of the end of 2020 and 2019: Cash Accounts receivable Office supplies Trucks Office equipment Land Building Accounts payable Notes payable December 31 2020 2019 $ 9,675 $ 26,550 11,375 14,450 1,750 2,350 29,000 29,000 75,500 71,000 24,500 92,000 19,050 3,850 54,500 During December 2020 the owner, Jess LeClaire, purchased a small office building and moved the business from rented quarters to the new building. The building and the land it occupies cost $116,500. The business paid $62,000 in cash and a note payable was signed for the balance. LeClaire had to invest $17,700 cash in the business to enable it to pay the $62,000. The business earned a profit during 2020, which enabled LeClaire to withdraw $1,700 per month from the business for personal expenses.

-b. Prepare balance sheet for the business as of the end of 2020.

2. Prepare a calculation to show how much profit was earned by the business during 2020.

Analysis Component:
Compare the increase in assets from December 31, 2019, to December 31, 2020., and complete the following table.

Answer 1

Answer b Amount Assets Current Assets LeClaire Delivery Services Balance Sheet December, 31 2020 Amount Amount Liabilities Accounts Payable $9,675 Note Payable $11,375 Total Liabilities $1,750 $22,800 Amount $19,050 $54,500 Cash $73,550 Accounts Receivable Office Supplies Equity Total Equity (Balancing Figure) $170,250 Non Current Assets Trucks Office Equipment Land Building $29,000 $75,500 $24,500 $92,000 $221,000 Total Assets $243,800 Total Equity and Liabilities $243,800 2 Calculation of Profit Earned by Business during 2020 Jess, LeClaire Capital December 31, 2019 Add: Additional Capital Invested Less: Drawing ($1,700 x 12) Add: Net Profit for 2020 (Balancing Figure) Jess, LeClaire Capital December 31, 2020 $139,500 $17,700 ($20,400) $33,450 $170,250

Analysis Component: Statement of Increase in Assets Assets as on December 31, 2020 Assets as on December 31, 2019 Increase in Assets $243,800 $143,350 $100,450 Increase in Assets Financed by Debt Increase in Assets Financed by Equity ($243,800 - $143,350 - $54,500) $54,500 $45,950 Explanations Amount LeClaire Delivery Services Balance Sheet December, 31 2019 Amount Amount Liabilities Accounts Payable $26,550 Note Payable $14,450 Total Liabilities $2,350 $43,350 Assets Current Assets Cash Accounts Receivable Office Supplies Amount $3,850 $3,850 Non Current Assets Trucks Office Equipment Equity Total Equity (Balancing Figure) $139,500 $29,000 $71,000 $100,000 Total Assets $143,350 Total Equity and Liabilities $143,350