Question

Transactions; Financial Statements

On July 1, 2019, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July:

1. Opened a business bank account with a deposit of $34,000 from personal funds.
2. Purchased office supplies on account, $3,490.
3. Paid creditor on account, $2,210.
4. Earned sales commissions, receiving cash, $35,600.
5. Paid rent on office and equipment for the month, $6,980.
6. Withdrew cash for personal use, $11,000.
7. Paid automobile expenses (including rental charge) for the month, $3,350, and miscellaneous expenses, $1,600.
8. Paid office salaries, $4,200.
9. Determined that the cost of supplies on hand was $1,170; therefore, the cost of supplies used was $2,320.

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.

b.

Bal.

c.

Bal.

d.

Bal.

e.

Bal.

f.

Bal.

g.

Bal.

h.

Bal.

i.

Bal.

2. Prepare an income statement for July.

Half Moon Realty
Income Statement
For the Month Ended July 31, 2019
Sales commissions		$
Expenses:
Rent expense	$
Office salaries expense
Automobile expense
Supplies expense
Miscellaneous expense
Total expenses
Net income		$

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		$
	$
Decrease in owners equity
Pat Glenn, capital, July 31, 2019		$

Prepare a balance sheet as of July 31.

Half Moon Realty
Balance Sheet
July 31, 2019
Assets
Cash	$
Supplies
Total assets	$
Liabilities
Accounts payable	$
Owner's Equity
Pat Glenn, capital
Total liabilities and owner's equity	$

Check My Work2 more Check My Work uses remaining.

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Answer 1

Part 1

	Assets		Liabilities	+	Stockholders’ equity
	Cash	+	Supplies	=	Accounts payable	+	Common stock	-	Drawings	+	Sales comission	-	Salaries expense	-	Rent expnse	-	Auto. Exp.	-	Supplies exp.	-	Misc. Exp.
a	+ 34000						+ 34000
b			+ 3490		+ 3490
Bal.	34000		3490		3490		34000
C	- 2210				- 2210
Bal.	31790		3490		1280		34000
d	+ 35600										+ 35600
Bal.	67390		3490		1280		34000				35600
e	-6980														-6980
Bal.	60410		3490		1280		34000				35600				6980
f	-11000								-11000
Bal.	49410		3490		1280		34000		11000		35600				6980
g	-4950																-3350				-1600
Bal.	44460		3490		1280		34000		11000		35600				6980		3350				1600
h	- 4200												- 4200
Ball.	40260		3490		1280		34000		11000		35600		4200		6980		3350				1600
i			-2320																-2320
Bal.	40260		1170		1280		34000		11000		35600		4200		6980		3350		2320		1600

Part 2

Half Moon Realty Income Statement For the Month Ended July 31, 2019
Sales commissions		35600
Expenses:
Rent expense	6980
Office salaries expense	4200
Automobile expense	3350
Supplies expense	2320
Miscellaneous expense	1600
Total expenses		18450
Net income		$17150

Half Moon Realty Statement of Owner's Equity For the Month Ended July 31, 2019
Pat Glenn, capital,July 1, 2019	34000
Net income	17150
Decrease in owners’ equity	11000
Pat Glenn, capital, July 31, 2019	$40150

Half Moon Realty Balance Sheet July 31, 2019
Assets
Cash	40260
supplies	1170
Total assets	$41430
Liabilities
Accounts payable	1280
Owner's Equity
Pat Glenn, capital	40150
Total liabilities and owner's equity	$41430