Accounting homework help: Problems: Series A homeworkcrew.com

PR 1-1A

Transactions

OBJ. 4

On June 1 of the current year, Pamela Schatz established a business to manage rental property. She completed the following transactions during June:

Opened a business bank account with a deposit of $55,000 from personal funds.
Purchased office supplies on account, $3,300.
Received cash from fees earned for managing rental property, $18,300.
Paid rent on office and equipment for the month, $8,300.
Paid creditors on account, $2,290.
Billed customers for fees earned for managing rental property, $30,800.
Paid automobile expenses (including rental charges) for the month, $1,380, and miscellaneous expenses, $1,800.
Paid office salaries, $7,300.https://homeworkcrew.com/
Determined that the cost of supplies on hand was $1,250; therefore, the cost of supplies used was $2,050.
Withdrew cash for personal use, $13,800.

Instructions

Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
Briefly explain why the owner’s investment and revenues increased owner’s equity, while withdrawals and expenses decreased owner’s equity.
Determine the net income for June.
How much did June’s transactions increase or decrease Pamela Schatz’s capital?

Answer

Check Figure: Cash bal. at end of June: $38,430

PR 1-2A

Financial Statements

OBJ. 5

The amounts of the assets and liabilities of Excalibur Travel Agency at December 31, 20Y5, the end of the year, and its revenue and expenses for the year follow. The capital of James Brewster, owner, was $710,000 on January 1, 20Y5, the beginning of the year. During the year, James withdrew $44,500.

Accounts payable	$ 73,500	Rent expense	$ 38,100
Accounts receivable	302,000	Supplies	5,800
Cash	201,900	Supplies expense	4,300
Fees earned	967,000	Utilities expense	30,200
Land	576,500	Wages expense	540,400
Miscellaneous expense	6,800

Instructions

Prepare an income statement for the year ended December 31, 20Y5.
Prepare a statement of owner’s equity for the year ended December 31, 20Y5.
Prepare a balance sheet as of December 31, 20Y5.
What item appears on both the statement of owner’s equity and the balance sheet?

Answer

Check Figure: 1. Net income: $347,200

PR 1-3A

Financial Statements

OBJ. 5

Seth Feye established Reliance Financial Services on July 1, 20Y2. Reliance Financial Services offers financial planning advice to its clients. The effect of each transaction and the balances after each transaction for July follow:

The transactions of Reliance Financial Services are shown in tabular equation form. First, the accounting equation is given: Assets = Liabilities plus Owner’s Equity. On the second line, the accounting equation is expanded into accounts: assets of Cash plus Accounts Receivable plus Supplies = liabilities of Accounts Payable plus owner’s equity of Seth Feye, Capital minus Seth Feye, Drawing plus Fees Earned minus Salaries Expense minus Rent Expense minus Auto Expense minus Supplies Expense minus Misc. Expense. Beginning balances for these accounts are not shown. The effects of Transaction a are shown on the third line: Cash is increased by 50,000, and Seth Feye, Capital is increased by 50,000. The fourth line shows the effect of Transaction b: Supplies is increased by 7,000, and Accounts Payable is increased by 7,000. A single rule appears below each of these numbers and the fifth line shows the resulting updated balances: Cash, 50,000; Supplies, 7,000; Accounts Payable, 7,000; and Seth Feye, Capital, 50,000. The sixth line shows the effects of Transaction c: Cash is decreased by 3,600, and Accounts Payable is decreased by 3,600. A single rule appears below each of these numbers and the seventh line shows the following updated balances: Cash, 46,400; Supplies, 7,000; Accounts Payable, 3,400; and Seth Feye, Capital, 50,000. The eighth line shows the effects of Transaction d: Cash is increased by 110,000, and Fees Earned is increased by 110,000. A single rule appears below each of these numbers and is followed by the following updated balances: Cash, 156,400; Supplies, 7,000; Accounts Payable, 3,400; Seth Feye, Capital, 50,000; and Fees Earned, 110,000. The tenth line shows the effects of Transaction e: Cash is decreased by 33,000 and Rent Expense is decreased by 33,000. A single rule appears below each of these numbers and the following updated balances are shown in the next line: Cash, 123,400; Supplies, 7,000; Accounts Payable, 3,400; Seth Feye, Capital, 50,000; Fees Earned, 110,000; and Rent Expense, negative 33,000. The twelfth line shows the effects of Transaction f: Cash is decreased by 20,800, Auto Expense is decreased by 16,000, and Misc. Expense is decreased by 4,800. A single rule appears below each of these numbers and the following updated balances appear on the next line: Cash, 102,600; Supplies, 7,000; Accounts Payable, 3,400; Seth Feye, Capital, 50,000; Fees Earned, 110,000; Rent Expense, negative 33,000; Auto Expense, negative 16,000; and Misc. Expense, negative 4,800. The fourteenth line shows the effects of Transaction g: Cash is decreased by 55,000, and Salaries Expense is decreased by 55,000. A single rule appears below each of these numbers and the next line shows the following updated balances: Cash, 47,600; Supplies, 7,000; Accounts Payable, 3,400; Seth Feye, Capital, 50,000; Fees Earned,110,000; Salaries Expense, negative 55,000; Rent Expense, negative 33,000; Auto Expense, negative 16,000; and Misc. Expense, negative 4,800. The sixteenth line shows the effects of Transaction h: Supplies is decreased by 4,500, and Supplies Expense is decreased by 4,500. A single rule appears below each of these numbers and the next line shows the following updated balances: Cash, 47,600; Supplies, 2,500; Accounts Payable, 3,400; Seth Feye, Capital, 50,000; Fees Earned, 110,000; Salaries Expense, negative 55,000; Rent Expense, negative 33,000; Auto Expense, negative 16,000; Supplies Expense, negative 4,500; and Misc. Expense, negative 4,800. The eighteenth line shows the effects of Transaction i: Accounts Receivable is increased by 34,500, and Fees Earned is increased by 34,500. A single rule appears below each of these numbers and the next line shows the following updated balances: Cash, 47,600; Accounts Receivable, 34,500; Supplies, 2,500; Accounts Payable, 3,400; Seth Feye, Capital, 50,000; Fees Earned, 144,500; Salaries Expense, negative 55,000; Rent Expense, negative 33,000; Auto Expense, negative 16,000; Supplies Expense, negative 4,500; and Misc. Expense, negative 4,800. The twentieth line shows the effects of Transaction j: Cash is decreased by 15,000, and Seth Feye, Drawing is decreased by 15,000. A single rule appears below each of these numbers and the next line shows the following updated balances: Cash, 32,600; Accounts Receivable, 34,500; Supplies, 2,500; Accounts Payable, 3,400; Seth Feye, Capital, 50,000; Seth Feye, Drawing, negative 15,000; Fees Earned, 144,500; Salaries Expense, negative 55,000; Rent Expense, negative 33,000; Auto Expense, negative 16,000; Supplies Expense, negative 4,500; and Misc. Expense, negative 4,800. A double rule appears below each of these figures.

Instructions

Prepare an income statement for the month ended July 31, 20Y2.
Prepare a statement of owner’s equity for the month ended July 31, 20Y2.
Prepare a balance sheet as of July 31, 20Y2.
(Optional) Prepare a statement of cash flows for the month ending July 31, 20Y2.

Answer

Check Figure: 1. Net income: $31,200

PR 1-4A

Transactions; Financial Statements

OBJ. 4, OBJ. 5

On July 1, 20Y7, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July:

Opened a business bank account with a deposit of $25,000 from personal funds.
Purchased office supplies on account, $1,850.
Paid creditor on account, $1,200.
Earned sales commissions, receiving cash, $41,500.
Paid rent on office and equipment for the month, $3,600.
Withdrew cash for personal use, $4,000.
Paid automobile expenses (including rental charge) for the month, $3,050, and miscellaneous expenses, $1,600.
Paid office salaries, $5,000.
Determined that the cost of supplies on hand was $950; therefore, the cost of supplies used was $900.

Instructions

Indicate the effect of each transaction and https://homeworkcrew.com/the balances after each transaction, using the following tabular headings:
Prepare an income statement for July, a statement of owner’s equity for July, and a balance sheet as of July 31.

Answer

Check Figure: 2. Net income: $27,350

PR 1-5A

Transactions; Financial Statements

OBJ. 4, OBJ. 5

D’Lite Dry Cleaners is owned and operated by Joel Palk. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company for a fee. The assets and liabilities of the business on July 1, 20Y6, are as follows: Cash, $45,000; Accounts Receivable, $93,000; Supplies, $7,000; Land, $75,000; Accounts Payable, $40,000. Business transactions during July are summarized as follows:

Joel Palk invested additional cash in the business with a deposit of $35,000 in the business bank account.
Paid $50,000 for the purchase of land adjacent to land currently owned by D’Lite Dry Cleaners as a future building site.
Received cash from cash customers for dry cleaning revenue, $32,125.
Paid rent for the month, $6,000.
Purchased supplies on account, $2,500.
Paid creditors on account, $22,800.
Charged customers for dry cleaning revenue on account, $84,750.
Received monthly invoice for dry cleaning expense for July (to be paid on August 10), $29,500.
Paid the following: wages expense, $7,500; truck expense, $2,500; utilities expense, $1,300; miscellaneous expense, $2,700.
Received cash from customers on account, $88,000.
Determined that the cost of supplies on hand was $5,900; therefore, the cost of supplies used during the month was $3,600.
Withdrew $12,000 cash for personal use.

Instructions

Determine the amount of Joel Palk’s capital as of July 1, 20Y6.
State the assets, liabilities, and owner’s equity as of July 1 in equation form similar to that shown in Exhibit 5. In tabular form below the equation, indicate increases and decreases resulting from each transaction and the new balances after each transaction.
Prepare an income statement for July, a statement of owner’s equity for July, and a balance sheet as of July 31.
(Optional) Prepare a statement of cash flows for July.

Answer

Check Figure: 3. Net income: $63,775

PR 1-6A

Missing Amounts from Financial Statements

OBJ. 5

The financial statements at the end of Wolverine Realty’s first month of operations are as follows:

An income statement for Wolverine Realty is shown for the month ended April 30, 2 0 Y 3. Fees earned are $(a), unknown amount a which is shown in parentheses in the second amount column. Under subtitle, Expenses, are the following: Wages expense, $300,000; Rent expense, 100,000; Supplies expense, (b), unknown amount b shown in parentheses; Utilities expense, 20,000; and Miscellaneous expense, 25,000. The expense amounts all appear in the first amount column and a single rule appears below the amount of 25,000. Total expenses are 475,000, which is shown in the second amount column. A single rule appears below the number 475,000. Net income is $275,000 and is shown in the second amount column. A double rule underscores the number $275,000. Below the income statement is a statement of owner’s equity for Wolverine Realty for the month ended April 30, 2 0 Y 3. Dakota Rowe, capital, April 1, 2 0 Y 3, is $(c), unknown amount c which is shown in parentheses in the second amount column. Investment on April 1, 2 0 Y 3 is $375,000, which is shown in the first amount column. Net income for April is (d), unknown amount d which is shown in parentheses in the first amount column. Withdrawals are (125,000), which is shown in parentheses in the first amount column. A single rule appears below the number (125,000). Increase in owner’s equity is (e), unknown amount e which is shown in parentheses in the second amount column. A single rule appears below the (e). Dakota Rowe, capital, April 30, 2 0 Y 3, is $(f), unknown amount f which is shown in parentheses in the second amount column. A double rule underscores the $(f). Below the statement of owner’s equity, a report form of the balance sheet for Wolverine Realty is shown for April 30, 2 0 Y 3. A three-line heading is centered and includes: Wolverine Realty (first line); Balance Sheet (second line); and April 30, 2 0 Y 3 (third line). The Assets section is listed first, followed by the Liabilities and then Owner’s Equity sections below. The subheading “Assets” is centered and includes: Cash, $462,500; followed by Supplies, 12,500; and Land, 150,000. A single rule appears below 150,000. This is followed by Total assets, $(g), unknown amount g which is shown in parentheses and a double rule underscores this number. The subheading “Liabilities” is centered below the Assets section and shows Accounts payable in the amount of $100,000. Below the Liabilities section is the Owner’s Equity section, which lists Dakota Rowe, capital of (h), unknown amount h which is shown in parentheses. A single rule appears below this number. Total liabilities and owner’s equity follows as $(i), unknown amount i which is shown in parentheses; the (i) is underscored with a double rule. Below the balance sheet, a statement of cash flows for Wolverine Realty is shown for the month ended April 30, 2 0 Y 3. Under Cash flows from (used for) operating activities: Cash received from customers is $(j), unknown amount j which is shown in parentheses in the first amount column. Cash paid for operating expenses and to creditors of (387,500), which is shown in parentheses and in the first amount column. A single rule underlines this number. Net cash flows from operating activities is $(k), unknown amount k which is shown in parentheses in the second amount column. Under Cash flows from (used for) investing activities: Cash paid for acquisition of land is (l), unknown amount l which is shown in parentheses in the second amount column. Under Cash flows from (used for) financing activities: Cash received from owner as investment is $(m), unknown amount m which is shown in parentheses in the first amount column. Cash withdrawals by owner is (n), unknown amount n which is shown in parentheses and in the first amount column. A single rule underlines the (n). Net cash flows from financing activities is (o), unknown amount o which is shown in parentheses in the second amount column. A single rule underlines the (o). Net increase (decrease) in cash is $(p), unknown amount p which is shown in parentheses in the second amount column. This is followed by Cash balance, April 1, 2 0 Y 3 of 0, in the second amount column and underlined with a single rule. The final line shows Cash balance, April 30, 2 0 Y 3 of $(q), unknown amount q which is shown in parentheses in the second amount column. A double rule underlines the (q).

Instructions

By analyzing the interrelationships among the four financial statements, determine the proper amounts for (a) through (q).

Answer

Check Figure: k. $362,500

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