CHAPTER 1 Introduction to Accounting and Business
Prob. 1-3A (Concluded)
4. (Optional)
Cash flows from (used for) operating activities:
Cash received from customers $ 110,000
Cash paid for expenses and to creditors* (112,400)
Net cash flows from operating activities $ (2,400)
Cash flows from (used for) investing activities 0
Cash flows from (used for) financing activities:
Reliance Financial Services
Statement of Cash Flows
For the Month Ended July 31, 20Y2
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-4A
1.
=+
+=+ – + –– –– –
(a) + 25,000 + 25,000
(b) + 1,850 + 1,850
Bal. 25,000 1,850 1,850 25,000
Bal. 61,700 1,850 650 25,000 41,500 – 3,600
(f) – 4,000 – 4,000
Bal. 57,700 1,850 650 25,000 – 4,000 41,500 – 3,600
(g) – 4,650 – 3,050 – 1,600
Bal. 53,050 1,850 650 25,000 – 4,000 41,500 – 3,600 – 3,050 – 1,600
Cash
Pat Glenn,
Drawing
Auto
Exp.
Assets Owner’s Equity
Supplies
Accts.
Payable
Liabilities
Pat Glenn,
Capital
Sales
Comm.
Salaries
Exp.
Supplies
Exp.
Misc.
Exp.
Rent
Exp.
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-4A (Concluded)
2.
Sales commissions $41,500
Expenses:
Salaries expense $5,000
Rent expense 3,600
Auto expense 3,050
Supplies expense 900
Pat Glenn, capital, July 1, 20Y7 $0
Investment on July 1, 20Y7 $25,000
Cash $48,050
Supplies 950
Total assets $49,000
Accounts payable $ 650
Assets
Liabilities
Owner’s Equity
Half Moon Realty
Income Statement
For the Month Ended July 31, 20Y7
Half Moon Realty
Statement of Owner’s Equity
For the Month Ended July 31, 20Y7
Half Moon Realty
Balance Sheet
July 31, 20Y7
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-5A
1. = +
Cash +++
=+
$45,000 +++
Owner’s Equity
Accounts
Payable
Assets
$93,000 $75,000
Accounts
Receivable
Liabilities
Joel Palk, Capital
Supplies Land
$7,000
$40,000
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-5A (Continued)
2. = +
+++=+ –
Bal. 45,000 93,000 7,000 75,000 40,000 180,000
(a) + 35,000 + 35,000
Bal. 80,000 93,000 7,000 75,000 40,000 215,000
Bal. 56,125 93,000 7,000 125,000 40,000 215,000
(e) + 2,500 + 2,500
Bal. 56,125 93,000 9,500 125,000 42,500 215,000
(f) – 22,800 – 22,800
Bal. 33,325 93,000 9,500 125,000 19,700 215,000
(g) + 84,750
Bal. 33,325 177,750 9,500 125,000 19,700 215,000
(h) + 29,500
Bal. 33,325 177,750 9,500 125,000 49,200 215,000
(i) – 14,000
Bal. 19,325 177,750 9,500 125,000 49,200 215,000
Owner’s Equity
Accts.
PayableCash
Assets
Accts.
Rec.
Liabilities
Supplies Land
Joel Palk,
Capital
Joel Palk,
Drawing
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-5A (Continued)
+–
–
–––––
Bal.
(a)
Bal.
(b)
(f)
Bal. 32,125 – 6,000
(g) + 84,750
Bal. 116,875 – 6,000
(h) – 29,500
Bal. 116,875 – 29,500 – 6,000
(i) – 7,500 – 2,500 – 1,300 – 2,700
Bal. 116,875 – 29,500 – 7,500 – 6,000 – 2,500 – 1,300 – 2,700
Owner’s Equity (Continued)
Utilities
Exp.
Supplies
Exp.
Dry
Cleaning
Revenue
Dry
Cleaning
Exp.
Wages
Exp.
Rent
Exp.
Truck
Exp.
Misc.
Exp.
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-5A (Continued)
3.
Dry cleaning revenue $116,875
Expenses:
Dry cleaning expense $29,500
Wages expense 7,500
Rent expense 6,000
Supplies expense 3,600
Joel Palk, capital, July 1, 20Y6 $180,000
Additional investment during July $ 35,000
Cash $ 95,325
Accounts receivable 89,750
Supplies 5,900
Land 125,000
Total assets $315,975
Accounts pa
y
able $ 49,200
For the Month Ended July 31, 20Y6
D’Lite Dry Cleaners
D’Lite Dry Cleaners
Income Statement
For the Month Ended July 31, 20Y6
D’Lite Dry Cleaners
Statement of Owner’s Equity
Assets
Liabilities
Balance Sheet
July 31, 20Y6
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-5A (Concluded)
4. (Optional)
Cash flows from (used for) operating activities:
Cash received from customers* $120,125
Cash paid for expenses and to creditors** (42,800)
Net cash flows from operating activities $ 77,325
Cash flows from (used for) investing activities:
Cash paid for purchase of land (50,000)
Cash flows from (used for) financing activities:
D’Lite Dry Cleaners
Statement of Cash Flows
For the Month Ended July 31, 20Y6
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-6A
a. Fees earned, $750,000 ($275,000 + $475,000)
b. Supplies expense, $30,000 ($475,000 – $300,000 – $100,000 – $20,000 – $25,000)
c. Dakota Rowe, capital, April 1, 20Y3, $0; Wolverine Realty was organized on
April 1, 20Y3.
g. Total assets, $625,000 ($462,500 + $12,500 + $150,000)
h. Dakota Rowe, capital, $525,000 ($625,000 – $100,000)
i. Total liabilities and owner’s equity, $625,000 ($100,000 + $525,000); same as (g)
j. Cash received from customers, $750,000; this is the same as fees
earned (a) since there are no accounts receivable.
k. Net cash flows from operating activities, $362,500 ($750,000 – $387,500)
l. Cash payments for acquisition of land, ($150,000)
m. Cash received as owner’s investment, $375,000
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-1B
1.
Assets = +
+ +=+ –+ –––– –
(a) + 50,000 + 50,000
(b) + 4,000 + 4,000
Bal. 50,000 4,000 4,000 50,000
Bal. 56,500 4,000 1,700 50,000 13,800 – 5,000
(f) – 1,450 – 1,150 – 300
Bal. 55,050 4,000 1,700 50,000 13,800 – 5,000 – 1,150 – 300
(g) – 2,500 – 2,500
Bal. 52,550 4,000 1,700 50,000 13,800 – 5,000 – 2,500 – 1,150 – 300
(h) – 1,300 – 1,300
Bal. 52,550 2,700 1,700 50,000 13,800 – 5,000 – 2,500 – 1,300 – 1,150 – 300
2. Owner’s equity is the right of owners to the assets of the business. These rights are increased by owner’s investments and revenues and decreased
by owner’s withdrawals and expenses.
3. $16,050 ($26,300 – $5,000 – $2,500 – $1,300 – $1,150 – $300)
Cash
Amy
Austin,
Drawing
Supplies
Expense
Owner’s Equity
Accts.
Rec. Supplies
Accts.
Payable
Liabilities
Amy Austin,
Capital
Fees
Earned
Salaries
Expense
Auto
Exp.
Misc.
Exp.
Rent
Expense
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-2B
1.
Fees earned $875,000
Expenses:
Wages expense $525,000
Rent expense 75,000
Utilities expense 38,000
2.
Harper Borg, capital, May 1, 20Y4 $180,000
Net income for the year $200,000
3.
Cash $146,000
Accounts receivable 210,000
Supplies 9,000
Total assets $365,000
Accounts payable $ 25,000
Assets
Liabilities
Wilderness Travel Service
Income Statement
For the Year Ended April 30, 20Y5
Wilderness Travel Service
Statement of Owner’s Equity
For the Year Ended April 30, 20Y5
Wilderness Travel Service
Balance Sheet
April 30, 20Y5
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-3B
1.
Fees earned $125,000
Expenses:
Salaries expense $58,000
Rent expense 27,000
2.
Jose Loder, capital, August 1, 20Y2 $0
Investment on August 1, 20Y2 $ 75,000
Net income for August 10,900
3.
Cash $38,000
Accounts receivable 33,000
Supplies 2,900
Total assets $73,900
Accounts pa
y
able $ 3,000
Assets
Liabilities
Bronco Consulting
Income Statement
For the Month Ended August 31, 20Y2
Bronco Consulting
Statement of Owner’s Equity
For the Month Ended August 31, 20Y2
Bronco Consulting
Balance Sheet
August 31, 20Y2
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-3B (Concluded)
4. (Optional)
Cash flows from (used for) operating activities:
Cash received from customers $ 92,000
Cash paid for expenses and to creditors* (114,000)
Net cash flows from operating activities $(22,000)
Cash flows from (used for) investing activities 0
Cash flows from (used for) financing activities:
Bronco Consulting
Statement of Cash Flows
For the Month Ended August 31, 20Y2
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-4B
1.
=+
+=+ –+ –––– –
(a) + 24,000 + 24,000
(b) – 3,600 – 3,600
(f) – 750 – 750
Bal. 37,500 1,200 450 24,000 19,800 – 3,600 – 1,350 – 600
(g) – 2,500 – 2,500
Bal. 35,000 1,200 450 24,000 19,800 – 3,600 – 2,500 – 1,350 – 600
(h) – 3,500 – 3,500
Bal. 31,500 1,200 450 24,000 – 3,500 19,800 – 3,600 – 2,500 – 1,350 – 600
Cash
Maria
Adams,
Drawing
Auto
Exp.
Assets Owner’s Equity
Supplies
Accts.
Payable
Liabilities
Maria
Adams,
Capital
Sales
Comm.
Salaries
Exp.
Supplies
Exp.
Misc.
Exp.
Rent
Exp.
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-4B (Concluded)
2.
Sales commissions $19,800
Expenses:
Rent expense $3,600
Salaries expense 2,500
Auto expense 1,350
Supplies expense 900
Maria Adams, capital, April 1, 20Y7 $0
Cash $31,500
Supplies 300
Total assets $31,800
Accounts payable $ 450
For the Month Ended April 30, 20Y7
Custom Realty
Custom Realty
Income Statement
For the Month Ended April 30, 20Y7
Custom Realty
Statement of Owner’s Equity
Assets
Liabilities
Balance Sheet
April 30, 20Y7
CHAPTER 1 Introduction to Accounting and Business
Prob. 1-5B
1. Liabilities +
Cash
Accounts
Receivable Supplies Land
Accounts
Payable +Beverly Zahn, Capital
Assets
+
+
=
=
Owner’s Equity
+