Preparing financial statements and evaluating business performance.
Accent Photography works weddings and prom-type parties. The balance of capital was $20,000 at December 31, 2010. At December 31, 2011, the business’ accounting records show these balances:
Insurance expense $8,000
Cash $31,000
Accounts payable $6,000
Advertising Expense $1,000
Service revenue $81,000
Owner withdrawal $15,000
Accounts receivable $10,000
Note payable $12,000
Owner equity ?
Salary expense $27,000
Equipment $60,000
Owner Investment $33,000
Prepare the following statements for Accent Photography for the year end December 31, 2011:
- Income statement
- Statement of owner’s equity
- Balance sheet
P2-46B
Analyzing and journalizing transactions, posting, and preparing trial balance.
Warren Smith practices medicine under the business title Warren Smith, M.D. During April, the medical practice completed the following transactions:
Apr 1 Smith deposited $78,000 cash in the business bank account. The business gave capital to Smith.
Apr 5 Paid monthly rent on medical equipment, $780.
Apr 9 Paid $18,000 cash to purchase land for an office site.
Apr 10 Purchased supplies on account, $1,200.
Apr 19 Borrowed $20,000 from the bank for business use. Smith signed a note to the bank in the name of the business.
Apr 22 Paid $800 on the account.
Apr 30 Revenue earned during the month included $5,900 cash and $4,900 on account.
Apr 30 Paid employees’ salaries $2,000, office rent$1,800, and utilities $420. Make a single compound entry.
Apr 30 Owner withdrew $9,000.
The business uses the following accounts:
Cash; Accounts receivable; supplies; Land; Accounts payable; Notes payable; Warren Smith, capital; Warren Smith, withdrawals; Service revenue; Salary expense; rent expense; Utility expense.
- Journalize each transaction, as shown for April. Explanations are not required.
April 1 Cash $78,000
Warren Smith, Capital $78,000
- Post the transactions to the T-accounts, using transaction dates as posting reference in the ledger accounts. Label the balance of each account balance as shown in chapter
- Prepare the trial balance of Warren Smith, M.D., at April 30, 2010.
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