Student Name:
Class:
Liabilities + Equity
Accounts Office Accounts H. Graham H. Graham
Date Cash Receivable Equipment Payable Capital Withdrawals Revenues Expenses
May 1 $40,000 40,000
1 (2,200) (2,200)
3 1,890 1,890
5 (750) (750)
8 5,400 5,400
12 2,500 2,500
15 (750) (750)
20 2,500 (2,500)
22 3,200 3,200
25 3,200 (3,200)
26 (1,890) (1,890)
27 80 (80)
28 (750) (750)
30 (300) (300)
30 (280) (280)
31 (1,400) (1,400)
42,780$ –$ 1,890$ 80$ 40,000$ (1,400)$ 11,100$ (5,110)$
Correct! Correct! Correct! Correct! Correct! Correct! Correct! Correct!
11,100$
2,200
1,500
750
300
280
80
5,110
5,990$
Correct!
$0
40,000
5,990
$45,990
1,400
$44,590
Correct!
Advertising expense
Total expenses
Net income
Utilities expense
H. Graham, Capital, May 1
Add: Investment by Owner
Net income
Less: Withdrawals by owner
H. Graham, Capital, May 31
McGraw-Hill/Irwin
Instructor
Assets =
For Month Ended May 31
Income Statement
Problem 01-07A
GRAHAM COMPANY
GRAHAM COMPANY
GRAHAM COMPANY
Consulting services revenue
Expenses
Cleaning expense
For the Month Ended May 31
Statement of Owner’s Equity
Revenues
Rent expense
Salaries expense
Telephone expense
Student Name:
Class:
McGraw-Hill/Irwin
Instructor
Problem 01-07A
Assets Liabilities
42,780$ 80$
1,890
Owner’s Equity
44,590
44,670$ $44,670
Correct! Correct!
11,100$
(2,200)
(750)
(300)
(280)
(1,500)
6,070$ «- Correct!
(1,890)
(1,890) «- Correct!
40,000
(1,400)
38,600 «- Correct!
42,780$
–
42,780$
Correct!
Purchase of equipment
Net cash used by investing activities
Net increase in cash
Cash balance, May 1
Cash balance, May 31
Cash flows from financing activities
Investments by owner
Withdrawals by owner
Net cash provided by financing activities
Cash paid for utilities
Cash paid to employees
Net cash provided by operating activities
Cash flows from investing activities
Cash flows from operating activities
Cash received from customers
Cash paid for rent
Cash paid for cleaning
Cash paid for telephone
Office equipment
Total assets
Accounts payable
H. Graham, Capital
Total liabilities and equity
Cash
May 31
Balance Sheet
GRAHAM COMPANY
May
1 Cash invested in company 40,000$
1 Cash paid for May rent 2,200
3 Office equipment purchased on credit 1,890
5 Cash paid for May cleaning services 750
8 Cash collected for services provided 5,400
12 Provided services on credit 2,500
15 Cash paid for assistant’s salary (1st half of May) 750
20 Cash received for services provided May 12 2,500
22 Provided services on credit 3,200
25 Cash received for services provided May 22 3,200
26 Cash paid for office equipment purchased May 3 1,890
27 Purchased May advertising, payment due June 1 80
28 Cash paid for assistant’s salary (2nd half of May) 750
30 Cash paid for May telephone bill 300
30 Cash paid for May utilities 280
31 Owner withdrew cash for personal use 1,400
Check figures:
(2) Ending balances
Cash 42,780$
Expenses 5,110$
(3) Net income 5,990$
Total assets 44,670$
Given Data P01-07A:
THE GRAHAM CO.
Transactions
Student Name:
Class:
Assets =Liabilities + Equity
Accounts Office Office Elect. Accounts H. Ander H. Ander
Date Cash Receivable Supplies Equip. Equip. Payable Capital Withdrawals Revenues Expenses
Dec. 1 65,000$ 65,000$
2 (1,000) (1,000)$
Bal. 64,000 65,000 – – (1,000)
3 (4,800) 13,000$ 8,200$
Bal. 59,200 13,000 8,200 65,000 – – (1,000)
5(800) 800$
Bal. 58,400 800 13,000 8,200 65,000 – – (1,000)
6 1,200 1,200$
Bal. 59,600 800 13,000 8,200 65,000 – 1,200 (1,000)
8 2,530$ 2,530
Bal. 59,600 800 2,530 13,000 10,730 65,000 – 1,200 (1,000)
15 5,000$ 5,000
Bal. 59,600 5,000 800 2,530 13,000 10,730 65,000 – 6,200 (1,000)
18 350 350
Bal. 59,600 5,000 1,150 2,530 13,000 11,080 65,000 – 6,200 (1,000)
20 (2,530) (2,530)
Bal. 57,070 5,000 1,150 2,530 13,000 8,550 65,000 – 6,200 (1,000)
24 900 900
Bal. 57,070 5,900 1,150 2,530 13,000 8,550 65,000 – 7,100 (1,000)
28 5,000 (5,000)
Bal. 62,070 900 1,150 2,530 13,000 8,550 65,000 – 7,100 (1,000)
29 (1,400) (1,400)
ANDER ELECTRIC
Problem 01-08A
McGraw-Hill/Irwin
Instructor
Student Name:
Class:
Problem 01-08A
McGraw-Hill/Irwin
Instructor
7,100$
1,000$
1,400
540
2,940
4,160$
Correct!
–$
65,000
4,160
69,160
950
H. Ander, Capital, December 31
Assets Liabilities
$59,180 8,550$
900
1,150
2,530
Owner’s Equity
13,000 68,210
Accounts payable
H. Ander, Capital
Office supplies
Office equipment
Electrical equipment
Cash
Accounts receivable
H. Ander, Capital, December 1
Plus: Owner investments
Net income
Total
Less: Withdrawals by owner
For the Month Ended December 31
Statement of Owner’s Equity
For the Month Ended December 31
ANDER ELECTRIC
ANDER ELECTRIC
Revenues
Electrical fees earned
Expenses
Rent expense
Salaries expense
Utilities expense
Net income
Income Statement
Total expenses
Student Name:
Class:
Problem 01-08A
McGraw-Hill/Irwin
Instructor
$76,760 Total liabilities and equity 76,760$
Correct! Correct!
Total assets
Student Name:
Class:
Problem 01-08A
McGraw-Hill/Irwin
Instructor
6,200$
(1,000)
(800)
(540)
(1,400)
(2,530)
(4,800)
(7,330) «- Correct!
Net cash provided by financing activities
Investments by owner
Withdrawals by owner
59,180$
–
Net cash provided by operating activities
59,180$
Correct!
Part 4:
Assume that the owner investment transaction on December 1 was $49,000 cash instead of $65,000
and that Ander Electric obtained another $16,000 in cash by borrowing it from the bank. Explain the
effect of this change on total assets, total liabilities, and total equity.
Net increase in cash
Cash balance, December 1
Purchase of office equipment
Cash balance, December 31
Purchase of electrical equipment
Net cash used by investing activities
Cash flows from financing activities
Cash paid for utilities
Cash paid to employees
Cash flows from investing activities
Cash paid for supplies
Cash received from customers
ANDER ELECTRIC
For Month Ended December 31
Statement of Cash Flows
Cash paid for rent
Cash flows from operating activities
If the December 1 owner investment had been $49,000 cash instead of $65,000
(a) total owner investments during this period, as well as the ending equity, would be $16,000 lower,
(b) total liabilities would be $16,000 greater, and
(c) total assets would remain the same.
and the $16,000 difference was borrowed by the company from a bank, then:
Student Name:
Class:
Problem 01-08A
McGraw-Hill/Irwin
Instructor
May
1 Transferred into business account 65,000$
2 Cash paid for month’s rent 1,000
3 Total paid for electrical equipment 13,000
Cash paid at time of purchase 4,800
5 Cash paid for office supplies 800
6 Amount collected for work completed 1,200
8 Office equipment purchased on credit 2,530
15 Completed work on credit 5,000
18 Office supplies purchased on credit 350
20 Cash paid for office equipment purchased
December 8 2,530
24 Billed client for work completed 900
28 Received for December 15th work 5,000
29 Paid assistant’s salary 1,400
30 Paid monthly utility bill 540
31 Withdrew for personal use 950
Check figures:
(2) Ending balances
Cash 59,180$
Accounts Payable 8,550$
(3) Net income 4,160$
Total assets 76,760$
Transactions
ANDER ELECTRIC
Given Data P01-08A: