Assignment
1. The account balances of Awesome Travel Services at December 31 are listed below. There were no additionalinvestments or withdrawals by J. Trendsetter during the year.
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Accounts Payable
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$12,000
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J. Trendsetter, Capital (Jan. 1)
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$10,000
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Accounts Receivable
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14,000
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Supplies
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1,000
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Cash
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18,000
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Taxes Expense
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1,300
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Computer Equipment
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21,000
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Utilities Expense
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8,000
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Fees Earned
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78,000
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Wages Expense
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25,000
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Rent Expense
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10,000
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Supplies Expense
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1,700
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Prepare an income statement, statement of owner's equity, and a balance sheet as of December 31.
2. Schultz Tax Services, a tax preparation business, had the following transactions during the month of June:
1. Received cash for providing accounting services, $3,000.
2. Billed customers on account for providing services, $7,000.
3. Paid advertising expense, $800.
4. Received cash from customers on account, $3,800.
5. Owner made a withdrawal, $1,500.
6. Received telephone bill, $220.
7. Paid telephone bill, $220.
Based on the information given above, calculate the balance of Cash at June 30
3. The assets and liabilities of Rocky's Day Spa at December 31 and expenses for the year are listed below. Thecapital of the owner was $68,000 at January 1. The owner invested an additional $10,000 during the year. Netincome for the year is $45,625.
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Accounts Payable
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$ 4,375
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Spa Operating Expense
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$23,760
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Accounts Receivable
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8,490
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Office Expense
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2,470
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Cash
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13,980
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Spa Supplies
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9,230
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Fees Earned
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???
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Wages Expense
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26,580
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Spa Furniture & Equipment
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56,000
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Drawing
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38,170
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Computers
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2,130
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Prepare an income statement for the current year ended December 31.
4. Match the following items to the financial statement where they can be found. (Hint: Some of the items canbe found on more than one financial statement.)
A. Balance Sheet
B. Income Statement
C. Statement of Cash Flows
D. Statement of Owner's Equity
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#
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Item
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1.
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Withdrawals
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2.
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Revenues
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3.
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Supplies
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4.
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Land
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5.
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Accounts Payable
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6.
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Accounts Receivable
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7.
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Operating Activities
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8.
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Wages Expense
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9.
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Net Income
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10.
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Cash
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5. The Austin Land Company sold land for $85,000 in cash. The land was originally purchased for $65,000. At thetime of the sale, $40,000 was still owed to Regions Bank. After the sale, The Austin Land Company paid off theloan. Explain the effect of the sale and the payoff of the loan on the accounting equation.
6. Simpson Auto Body Repair purchased $20,000 of machinery. The company paid $8,000 in cash at the time of thepurchase and signed a promissory note for the remainder to be paid in four monthly installments.How will the purchase affect the accounting equation?
7. Daniels Company is owned and operated by Thomas Daniels. The following selected transactions were completedby Daniels Company during May:
1. Received cash from owner as additional investment, $55,000.
2. Paid creditors on account, $7,000.
3. Billed customers for services on account, $2,565.
4. Received cash from customers on account, $8,450.
5. Paid cash to owner for personal use, $2,500.
6. Received the utility bill, $160, to be paid next month.
Indicate the effect of each transaction on the accounting equation by:
1) Account type
2) Name of account
3) The amount by of the transaction
4) The direction of change (increase or decrease) in the account affected
8. Shiny Kar Company had the following transactions. For each transaction, show the effect on the accountingequation by putting the amount and direction (plus, minus, or NC for no change) in each box of the table below.
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Assets
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Liabilities
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Owner's Equity
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a. ShinyKar withdrew $500 cash for food.
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b. ShinyKar Company sold 2 cars for a total of $55,000on account.
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d. ShinyKar received $35,000 payment for a carpreviously sold on account.
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e. ShinyKar paid $450 for advertising.
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f. ShinyKar purchased $150 of cleaning supplies onaccount.
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