Transactions: financial statements
On January 1, 2012, Carlton Myers established Vista Realty. Carlton completed the following transactions during the month of January:
a. Opened a business bank account with a deposit of $25,000 from personal funds.
b. Purchased supplies (pens, file folders, paper, etc.) on account, $2,500.
c. Paid creditor on account, $1,600.
d. Earned sales commissions, receiving cash, $25,500.
e. Paid rent on office and equipment for the month, $5,000.
f. Withdrew cash for personal use, $8,000.
g. Paid automobile expenses (including rental charge) for month, $2,500, and miscellaneous expenses, $1,200.
h. Paid office salaries, $3,000.
i. Determined that the cost of supplies on hand was $850; therefore, the cost of supplies used was $1,650.
Instructions
1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
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Assets
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= Liabilities +
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Owner's Equity
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Carlton
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Carlton
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Office
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|
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Accounts
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Myers
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Myers,
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Sales
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Rent
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Salaries
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Auto
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Supplies
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Cash
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+ Supplies
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Payable
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+ Capital
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Drawing
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+ Commissions
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- Expense
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- Expense
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- Expense
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- Expense
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- Expense
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2. Prepare an income statement for January, a statement of owner's equity for January, and a balance sheet as of January 31.