Applying the entity concept, using the accounting equation for transaction analysis, and p...

Applying the entity concept, using the accounting equation for transaction analysis, and preparing financial statements

Arron Woody practiced accounting with a partnership for five years. Recently he opened his own accounting firm, which he operates as a proprietorship. The name of the new entity is Arron Woody, CPA. Woody experienced the following events during the organizing phase of the new business and its first month of operations. Some of the events were personal and did not affect the business.

Requirements

1. Analyze the effects of the events on the accounting equation of the proprietorship of Arron Woody, CPA. Use a format similar to Exhibit 1-6.

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2. As of February 28, compute Arron Woody’s

a. total assets.

b. total liabilities.

c. total owner’s equity.

d. net income or net loss for February.