John Arrow is an architect who operates his own business. The transactions for the business during January 2016 follow.
|a.||John Arrow invested $40,000 in cash to start the business.|
|b.||Paid $4,000 for advertisements in a design magazine.|
|c.||Purchased office furniture for $4,600 in cash.|
|d.||Performed services for $9,100 in cash.|
|e.||Paid $420 for the monthly telephone bill.|
|f.||Performed services for $3,120 on credit.|
|g.||Purchased a fax machine for $650; paid $150 in cash with the balance due in 30 days.|
|h.||Paid a bill for $1,100 from the office cleaning service.|
|i.||Received $4,260 from clients on account.|
|j.||Purchased additional office chairs for $1,090; received credit terms of 30 days.|
|k.||Paid $8,000 for salaries.|
|l.||Issued a check for $550 in partial payment of the amount owed for office chairs.|
|m.||Received $4,600 in cash for services performed.|
|n.||Issued a check for $920 for utilities expense.|
|o.||Performed services for $4,300 on credit.|
|p.||Collected $1,800 from clients on account.|
|q.||John Arrow withdrew $5,000 in cash for personal expenses.|
|r.||Paid $1,200 to Quick Copy Service for photocopy work performed during the month.|
(Hint: Include office cleaning services and photocopy expenses under "Miscellaneous Expenses".)
Post the above transactions into the appropriate T accounts.
Prepare a trial balance.
Prepare an income statement.
Prepare a statement of owner's equity.
Prepare a balance sheet.
Using the basic accounting equation, what is the financial condition of John Arrow's business at month-end?
|Worksheet||Learning Objective: 03-02 Analyze business transactions and enter them in the accounts.||Learning Objective: 03-05 Prepare a trial balance from T accounts.|
|Difficulty: 3 Hard||Learning Objective: 03-03 Determine the balance of an account.||Learning Objective: 03-06 Prepare an income statement, a statement of owners equity, and a balance sheet.|
|Learning Objective: 03-01 Set up T accounts for assets, liabilities, and owners equity.||Learning Objective: 03-04 Set up T accounts for revenue and expenses.|
|$15.00||no category||cinedine2||0 time(s)|
|$15.00||no category||hardik777||1 time(s)|