Clark Brooks owns a consulting firm called Metrix, which began operations on April 1. The company...

 

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Clark Brooks owns a consulting firm called Metrix, which began operations on April 1. The company had the following fransactions during April. Clark invested $400,000 cash and $800,000 office equipment into the business. Purchased a building for $800,000. The company paid $200,000 in cash and signed a note payable for $600,000. Purchased supplies costing $4,000 on account. Received advance payments of $12,000 from customers for whom services would be provided in the following five months. Received cash payments of $13,000 from providing services to customers. Completed a $15,000 work for a client, who must pay within 10 days. Paid $2,000 cash for staff salaries. Paid for the supplies purchased on April 5. Received the whole payment on the receivable created on April 15. Clark withdrew $4,000 for personal use. April 1 April 2 April 5 April 10 April 14 April 15 April 16 April 24 April 25 April 30 Required: (Explanations/Narratives are not required for journal entries.) 1. Prepare journal entries to record these transactions (use account titles listed in part 2). (9 marks) 2. Open the following ledger accounts in balance column format: Cash (101); Accounts Receivable (106); Office Supplies (124); Office Equipment (163); Building (170); Accounts Payable (201); Notes Payable (250); Unearned Service Revenue (236); C. Brooks, Capital (301); C. Brooks, Withdrawals (302); Services Revenue (401); and Salaries Expense (601). Post journal entries from part 1 to the ledger accounts. 3. Prepare a trial balance as of April 30. (7 marks) (2 marks) Part B (2 marks) Describe the link between a business's income statement, the statement of changes in equity, and the balance sheet. Which statement reports a business's financial position at a point in time? (2 marks) Clark Brooks owns a consulting firm called Metrix, which began operations on April 1. The company had the following fransactions during April. Clark invested $400,000 cash and $800,000 office equipment into the business. Purchased a building for $800,000. The company paid $200,000 in cash and signed a note payable for $600,000. Purchased supplies costing $4,000 on account. Received advance payments of $12,000 from customers for whom services would be provided in the following five months. Received cash payments of $13,000 from providing services to customers. Completed a $15,000 work for a client, who must pay within 10 days. Paid $2,000 cash for staff salaries. Paid for the supplies purchased on April 5. Received the whole payment on the receivable created on April 15. Clark withdrew $4,000 for personal use. April 1 April 2 April 5 April 10 April 14 April 15 April 16 April 24 April 25 April 30 Required: (Explanations/Narratives are not required for journal entries.) 1. Prepare journal entries to record these transactions (use account titles listed in part 2). (9 marks) 2. Open the following ledger accounts in balance column format: Cash (101); Accounts Receivable (106); Office Supplies (124); Office Equipment (163); Building (170); Accounts Payable (201); Notes Payable (250); Unearned Service Revenue (236); C. Brooks, Capital (301); C. Brooks, Withdrawals (302); Services Revenue (401); and Salaries Expense (601). Post journal entries from part 1 to the ledger accounts. 3. Prepare a trial balance as of April 30. (7 marks) (2 marks) Part B (2 marks) Describe the link between a business's income statement, the statement of changes in equity, and the balance sheet. Which statement reports a business's financial position at a point in time? (2 marks)

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Requirement 2 Requirement 3 Trial Balance as on 30 April Partic... View the full answer