Question

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Transactions; Financial Statements On July 1, 2019, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July: Opened a business bank account with a deposit of $20,000 from personal funds. Purchased office supplies on account, $2,010. Paid creditor on account, $1,270. Earned sales commissions, receiving cash, $20,480. Paid rent on office and equipment for the month, $4,010. Withdrew cash for personal use, $6,000. Paid automobile expenses (including rental charge) for the month, $1,930, and miscellaneous expenses, $920. Paid office salaries, $2,420. Determined that the cost of supplies on hand was $680; therefore, the cost of supplies used was $1,330. Required: 1. Indicate the effect of each transaction and the balances after each transaction. For those boxes in which no entry is required, leave the box blank. If required, enter negative values as negative numbers. Assets = Liabilities + Owner's Equity Cash + Supplies = Accounts Payable + Pat Glenn, Capital - Pat Glenn, Drawing + Sales Commissions - Rent Expense - Office Salaries Expense - Auto Expense - Supplies Expense - Miscellaneous Expense a. 20,000 20,000 b. 2,010 Bal. 20,000 2,010 2,010 20,000 c. -1,270 -1,270 Bal. 18,730 2,010 740 20,000 d. 20,480 20,480 Bal. 39,210 2,010 740 20,000 20,480 e. -4,010 -4,010 Bal. 35,200 2,010 740 20,000 20,480 -4,010 f. -6,000 -6,000 Bal. 29,200 2,010 740 20,000 -6,000 20,480 -4,010 g. -2,850 -1,930 -920 Bal. 26,350 2,010 740 20,000 -6,000 20,480 -4,010 -1,930 -920 h. -2,420 -2,420 Bal. 23,930 2,010 740 20,000 -6,000 20,480 -4,010 -2,420 -1,930 -920 i. -1,330 -1,330 Bal. 23,930 680 740 20,000 -6,000 20,480 -4,010 -2,420 -1,930 -1,330 -920 2. Prepare an income statement for July. Half Moon Realty Income Statement For the Month Ended July 31, 2019 Sales commissions $ 22,480 Expenses: Rent expense $ -4,010 Office salaries expense -2,420 Automobile expense -1,930 Supplies expense -1,330 Miscellaneous expense -920 Total expenses 10,610 Net income $ 11,870 Prepare a statement of owner's equity for July. If an amount is zero, enter "0". Half Moon Realty Statement of Owner's Equity For the Month Ended July 31, 2019 Pat Glenn, capital,July 1, 2019 $ 0 Pat Glenn, capital, July 31, 2016 $ 20,000 Net income for July 11,870 Withdrawals -6,000 Pat Glenn, capital, July 31, 2019 $ Prepare a balance sheet as of July 31. Half Moon Realty Balance Sheet July 31, 2019 Assets $ Total assets $ Liabilities $ Owner's Equity Total liabilities and owner's equity $

Answer 1

Half Moon Realty
Income statement
For the month ended July 31, 2019
Sales commissions		20,480
Less: Expenses
Rent expense	4,010
Office salaries expense	2,420
Automobile expense	1,930
Supplies expense	1,330
Miscellaneous expense	920
Total expense		10,610
Net income		9,870

Half Moon Realty
Statement of owners' equity
For the month ended July 31, 2019
Pat Glenn, capital,July 1, 2019	20,000
Add: Net income	9,870
Less: Pat Glenn, Drawings	-6,000
Pat Glenn, capital,July 31, 2019	23,870

Half Moon Realty
Income statement
As at July 31, 2019
Assets:
Cash	23,930
Supplies	680
Total assets		24,610
Liabilities and owners' equity
Liabilities:
Accounts payable	740
Equity:
Pet Glenn, Capital	23,870
Total liabilities and owners' equity		24,610