Accounting 101 ACT101 - 74300

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  • From: Finance,
  • Due on: Wed 10 Sep, 2014 (11:23pm)
  • Asked on: Wed 10 Sep, 2014
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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.  


2 Solution for Accounting 101 ACT101
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Accounting 101. Financial Statements
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ACT 101 Solution (***** Included All Details *****) A+ Work
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