Question

LO1

The totals of T accounts are called footings. To figure out the account balance, subtract the total of the smaller side from the total of the larger side. Record the account balance on the larger side.

Cash Accounts Payable    +          –            Debit      Credit     (a) 12,000     (b) 700     (e) 1,100     (g) 175     (h) 1,050     Bal.       –          +            Debit      Credit     (c) 750     (d) 3,250                       Bal.    Rent Expense Accounts Receivable    +          –            Debit      Credit     (b) 700     Bal.       +          –            Debit      Credit     (f) 1,240     (h) 1,050     Bal.    P. Martin, Capital Supplies    –          +            Debit      Credit           (a) 12,000           (f) 1,240           Bal.       +          –            Debit      Credit     (g) 175           Bal.    P. Martin, Drawing Office Equipment    +          –            Debit      Credit     (e) 1,100     Bal.       +          –            Debit      Credit     (d) 3,250     (c) 750     Bal.

LO5

A trial balance is a list of all account balances in two columns—one labeled “Debit” and one labeled “Credit.” The trial balance shows that both sides of the accounting equation are equal. The heading consists of the company name, the title of the form (trial balance), and the date.

Using the following account balances, prepare a trial balance for Pat Martin’s Music Entertainment as of May 31, 20__.

Asset   Cash $ 22,035   Accounts Receivable 325   Supplies 500   Music Equipment 2,685 Liabilities   Accounts Payable 1,050 Owner’s Equity   P. Martin, Capital 22,230   P. Martin, Drawing 1,000

Revenue   Music Fees $5,925 Expenses   Advertising Expense 750   Rent Expense 1,250   Wages Expense 525   Utilities Expense 135

List all the accounts in the proper order as described in the textbook. If an amount box does not require an entry, leave it blank or enter "0".

Pat Martin's Music Entertainment
Trial Balance
May 31, 20--
Account	Debit Balance	Credit Balance
	$	$
Totals	$	$

LO6

Financial Statements include: (a) An income statement shows the results of operations of a business for a period of time. It includes revenue and expense accounts and reports either a net income or a net loss. (b) A statement of owner's equity shows the activity in the owner's equity, or Capital account, for a period of time. It includes the balance in the Capital account at the beginning of the period plus any additional investments and any increase or decrease in capital as the result of a net income (or a net loss) minus any withdrawals. (c) A balance sheet shows the financial condition of a business at a particular date in time. It summarizes the balances of the asset, liability, and owner's equity accounts on a given date.

Asset   Cash $ 22,035   Accounts Receivable 325   Supplies 500   Music Equipment 2,685 Liabilities   Accounts Payable 1,050 Owner’s Equity   P. Martin, Capital 22,230   P. Martin, Drawing 1,000

Revenue   Music Fees $5,925 Expenses   Advertising Expense 750   Rent Expense 1,250   Wages Expense 525   Utilities Expense 135

Using the above account balances, prepare an Income Statement for Pat Martin's Music Entertainment as of May 31, 20__.

Pat Martin's Music Entertainment
Income Statement
May 31, 20--
Revenues
		$
Expenses
	$
Total Expenses
		$

Using the above account balances, prepare a Statement of Owner’s Equity for Pat Martin’s Music Entertainment as of May 31, 20__. If an amount is zero, enter "0".

Pat Martin's Music Entertainment
Statement of Owner's Equity
May 31, 20--
		$
	$
Subtotal	$
		$

Using the above account balances, prepare a Balance Sheet for Pat Martin’s Music Entertainment as of May 31, 20__.

Pat Martin's Music Entertainment
Balance Sheet
May 31, 20--
Assets
	$
Total Assets		$
Liabilities
		$
Owner's Equity
Total Liabilities and Owner's Equity		$

Answer 1

LO 6 :

a.

Pat Martin's Music Entertainment Income Statement For the period ended May 31, 20...
	$	$
Revenues
Music Fees		5,925
Expenses
Advertising Expense	750
Rent Expense	1,250
Wages Expense	525
Utilities Expense	135
Total Expenses		2,660
Net Income		$ 3,265

b.

Pat Martin's Music Entertainment Statement of Owner's Equity For the period ended May 31, 20....
P. Martin, Capital, Beginning	$ 22,230
Add: Net Income	3,265
Sub-total	25,495
Less: P. Martin, Drawing	(1,000)
P. Martin, Capital, May 31	$ 24,495

c.

Pat Martin's Music Entertainment Balance Sheet May 31, 20...
Assets	$
Cash	22,035
Accounts Receivable	325
Supplies	500
Music Equipment	2,685
Total Assets	$ 25,545
Liabilities
Accounts Payable	$ 1,050
Owner's Equity
P. Martin, Capital	$ 24,495
Total Liabilities and Owner's Equity	$ 25,545