Question

Angela Pivone recently opened her own law office on March 1, which she operates as a sole proprietorship. The name of the new entity is Angela Pivone, Attorney. Pivone experienced the following events during the organizing phase of the new business and its first month of operation, March 2018. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business.

Mar. 1 Sold personal investment in Amazon.com stock, which she had owned for several years, receiving $26,000 cash. 2 Deposited the $26.000 cash from the sale of the Amazon.com stock in her personal bank account. 3 Deposited $80,000 cash in a new business bank account titled Angela Pivone, Attorney. The business gave capital to Pivone. 5 Paid $400 cash for ink cartridges for the printer. 7 Purchased computer for the law office, agreeing to pay the account, $6,800, within three months. 9 Received $1,800 cash from customers for services rendered 15 Received bill from The Lawyer for magazine subscription, $390. (Use Miscellaneous Expense account.) rt hearings on behalf of a client and submitted a bill for legal services, $11,000, on account 28 Paid bill from The Lawyer. 30 Paid utilities, $920. 31 Received $2,900 cash from clients billed on March 23. 31 Pivone withdrew cash of $6,000. Print Done

Answer 1

Angela Pivone Requirement 1 Date Cash 80000 -400 79600 Bal. Bal. 79600 1800 81400 Bal. 81400 Bal. 23 Bal. Assets Liabilities Equity Accounts Office = Accounts Petrillo Petrillo Service Utilities Miscellaneous + Receivable + Supplies + Computer = Payable + Capital - Withdrawals + Revenue - Expense - Expense 80000 400 400 80000 0 0 6800 6800 400 6800 6800 80000 1800 400 6800 6800 80000 1800 390 390 400 6800 7190 80000 1800 390 11000 11000 11000 400 6800 7190 80000 12800 390 -390 11000 400 6800 6800 80000 12800 390 920 11000 400 6800 6800 80000 12800 920 390 -2900 8100 400 6800 6800 80000 0 12800 920 390 6000 8100 400 6800 6800 80000 6000 12800 920 390 92290 92290 Bal. 30 Bal. 81400 -390 81010 -920 80090 2900 82990 -6000 76990 31 Bal. 31 Bal.

Requirement 2a 12800 Income Statement Month Ended March 31, 2018 Revenue: Service Revenue Expenses: Utilities Expense Miscellaneous Expense Total Expenses Net Income 920 390 1310 11490 Requirement 2b Statement of Owner's Equity Month Ended March 31, 2018 Petrillo, Capital, March 1, 2018 Owner contribution Net income for the month 0 80000 11490 91490 -6000 85490 Owner withdrawal Petrillo, Capital, March 31, 2018 11490 Statement of Cashflow Month Ended March 31, 2018 Cashflow fom Operating Activity Net Income Adjustments: Increase in Accounts Receivable -8100 Increase in Office Supplies -400 Increase in Accounts Payable 6800 Cash generated from operating activity -1700 9790 Cashflow fom Investing Activity Computer Purchased -6800 -6800 Cashflow fom Financing Activity Petrillo, Capital 80000 Petrillo, withdrawal -6000 Cash generated from Financing activity Net increase in Cash Beginning Cash Balance Ending Cash Balance 74000 76990 76990

Requirement 2c Amounts 6800 Balance Sheet As at March 31, 2018 Assets Cash Accounts Receivable Office Supplies Computer Total Assets Amounts Liabilities 76990 Accounts Payable 8100 400 Owner's Equity 6800 Petrillo, Capital 92290 Total Liabilities and Owner's Equity 85490 92290