The equation below shows the transactions of Kathryn Proctor, Attorney and Counselor at Law, during August. This law firm is owned by Kathryn Proctor.

INSTRUCTIONS
Analyze each transaction carefully. Prepare an income statement and a statement of owner’s equity for the month. Prepare a balance sheet for August 31, 20X1. List the expenses in detail on the income statement.

Analyze: 

In order to complete the statement of owner’s equity, which amount was transferred from the income statement?

Transcribed Image Text:

Balances, Aug. 1 Paid for utilities New balances Performed services for cash New balances Paid a creditor New balances Performed services on credit New balances Paid salaries New balances Paid telephone bill New balances Withdrew cash for personal expenses New balances Assets = Cash + 7,200 -600 6,600 + 1,800+ 5,400 + 10,000 = 12,000 + -5,400 Accts. Rec. + Supp. + Equip. = 1,800 + 5,400 + 10,000 = +6,000 12,600 + 1,800 + 5,400 + 10,000 = -600 12,000 + 1,800+ 5,400 + 10,000 = 6,600 + -480 6,120 + +4,800 6,600 + 5,400 + 10,000 = 6,600+5,400 + 10,000 = 6,600+ 5,400 + 10,000 = -1,200 4,920 + 6,600+ 5,400 + 10,000 = Llab. + Accts. Pay. + 1,200 + 1,200 + 1,200 + -600 600 + 600 + 600 + 600 + 600 + K. Proctor, Capital + Rev. 23,200 + 23,200 23,200 23,200 + Owner's Equity 23,200 23,200 + 23,200 + -1,200 22,000 + 0 0 +6,000 6,000 6,000 +4,800 10,800 + 10,800 + 10,800 + 10,800 - - - Exp. 0 +600 600 600 600 600 +5,400 6,000 +480 6,480 6,480