Question

The accountant for the firm owned by Conner McAllister prepares financial statements at the end of each month.

INSTRUCTIONS
Use the figures in the T accounts for Problem 3.4B to prepare a trial balance, an income statement, a statement of owner’s equity, and a balance sheet. (The first line of the statement headings should read “Conner McAllister, Counselor and Attorney at Law.”) Assume that the transactions took place during the month ended April 30, 2016. Determine the account balances before you start work on the financial statements.
Analyze: What net change in owner’s equity occurred during the month of April?
In Problem 3.4B
a. Conner McAllister invested $140,000 in cash to start the business.
b. Paid $7,800 for the current month’s rent.
c. Bought a used automobile for the firm for $38,500 in cash.
d. Performed services for $10,500 in cash.
e. Paid $1,850 for automobile repairs.
f. Performed services for $11,280 on credit.
g. Purchased office chairs for $6,500 on credit.
h. Received $5,400 from credit clients.
i. Paid $3,800 to reduce the amount owed for the office chairs.
j. Issued a check for $1,590 to pay the monthly utility bill.
k. Purchased office equipment for $22,800 and paid half of this amount in cash immediately; the balance is due in 30 days.
l. Issued a check for $18,900 to pay salaries.
m. Performed services for $7,450 in cash.
n. Performed services for $6,500 on credit.
o. Paid $967 for the monthly telephone bill.
p. Collected $4,200 on accounts receivable from charge customers.
q. Purchased additional office equipment and received a bill for $6,880 due in 30 days.
r. Paid $900 in cash for gasoline purchased for the automobile during the month.
s. Conner McAllister withdrew $8,000 in cash for personal expenses.



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  • CreatedAugust 08, 2014
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