Question

The accountant for the firm owned by Randy Guttery prepares financial statements at the end of each month. The following transaction for Randy Guttery, Landscape Consultant took place during the end month ended June 30, 2019.

Transactions:

a. Guttrey invested $ 155,000 in cash to start business.

b. Paid $ 5,500 for currents month's rent.

c. Bought office furniture for $ 16,220 in cash.

d. Performed services for $ 7,700 in cash.

e. Paid $ 1,200 for the monthly telephone bill.

f. Performed services for $13,500 on credit.

g. Purchased a computer and copier for $ 37,000; paid $ 12,500 in cash immediately with the balance due in 30 days.

h. Received $ 6,750 from credit clients.

i. Paid $ 3,500 in cash for office services cleaning for the month.

j. Purchased additional office chairs $ 5,300; received credit terms for 30 days.

k. Purchased office equipment for $ 35,000 and paid half of this amount in cash immediately; the balance is due in 30 days.

l. Issued a check for $ 8,900 to pay salaries.

m. Performed services for $ 14,000 in cash.

n. Performed services for $15,500 on credit.

o. Collected $ 7,500 on accounts receivable from charged customers.

p. Issued a check $ 2,650 in partial payment owned for office chairs.

q. Paid $ 650 to a duplicating company for photocopy work preformed during the month.

r. Paid $ 1,170 for monthly electric bill.

s. Guttrey withdrew $ 8,500 in cash for personal expenses.

Required:

Prepared a trial balance, an income statement, a statement of owner's equity and a balance sheet. Assume that the transaction took place during the month June 30, 2019. Determine the account balances before you start work on the financial statements.

Analize:

What is the change of owners equity for the month of June?

Answer 1

Ans-

		Assets						LIabilities				Stockholders' Equity
	Cash	Office Furniture	Computer and Copier	Office Equipment	Drawings	Accounts Receivable		Accounts Payable	Owner's Capital	Revenue	Telephone Expenses	Office Cleaning Expenses	Electricity Expenses	Photocopy Charges	Rent Expenses	Salaries Expenses
a.	155,000								155,000
b.	(5,500)														(5,500)
c.	(16,220)	16,220
d.	7,700									7,700
e	(1,200)										(1,200)
f.						13,500				13,500
g.	(12,500)		37,000					24,500
h.	6,750					(6,750)
i.	(3,500)											(3,500)
j.		5,300						5,300
k.	(17,500)			35,000				17,500
l.	(8,900)															(8,900)
m.	14,000									14,000
n.						15,500				15,500
o.	7,500					(7,500)
p.	(2,650)							(2,650)
q.	(650)													(650)
r.	(1,170)												(1,170)
s.	(8,500)				8,500
Total	$112,660	$21,520	$37,000	$35,000	$8,500	$14,750		$44,650	$155,000	$50,700	($1,200)	($3,500)	($1,170)	($650)	($5,500)	($8,900)
	Assets						=	Liabilities	+	Stockholders' Equity
	$229,430							$44,650	+	$184,780

Trial Balance

	Debit ($)	Credit ($)
Cash	112,660
Office Furniture	21,520
Computer and Copier	37,000
Office Equipment	35,000
Drawings	8,500
Accounts Receivable	14,750
Accounts Payable		44,650
Owner's Capital		155,000
Revenue		50,700
Telephone Expenses	1,200
Office Cleaning Expenses	3,500
Electricity Expenses	1,170
Photocopy Charges	650
Rent Expenses	5,500
Salaries Expenses	8,900
Totals	$250,350	$250,350

Income Statement

Revenue		50,700
Telephone Expenses	1,200
Office Cleaning Expenses	3,500
Electricity Expenses	1,170
Photocopy Charges	650
Rent Expenses	5,500
Salaries Expenses	8,900
Total Expenses		20,920
Net Income		$29,780

Statement of Owner's Equity

Owner's Capital , June 1,2019	0
Add:Contribution during the period	155,000
Add: Net Income	29,780
Less:Withdrawal	8,500
Owner's Capital June 30,2019	$176,280

Balance Sheet

Assets
Cash	112,660
Accounts Receivable	14,750
Total Current Assets	127,410
Office Furniture	21,520
Computer and Copier	37,000
Office Equipment	35,000
Total Assets	$220,930
Liabilities
Accounts Payable	44,650
Total Laibilities	44,650
Owner's Equity
Owner's Capital	176,280
Total Liabilities and Owner's Equity	$220,930

The change of owner's equity for the month of june is $21,280 ($176,280-$155,000).

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