Question: The accountant for the firm owned by Horace Brock prepares

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

Use the figures in the T accounts for Problem 3.4A 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 “Horace Brock, Landscape Consultant.”) Assume that the transactions took place during the month ended June 30, 2016. Determine the account balances before you start work on the financial statements.
Analyze: What is the change in owner’s equity for the month of June?
In Problem 3.4A
a. Brock invested $160,000 in cash to start the business.
b. Paid $6,000 for the current month’s rent.
c. Bought office furniture for $16,720 in cash.
d. Performed services for $8,200 in cash.
e. Paid $1,250 for the monthly telephone bill.
f. Performed services for $14,000 on credit.
g. Purchased a computer and copier for $38,000, paid $13,000 in cash immediately with the balance due in 30 days.
h. Received $7,000 from credit clients.
i. Paid $4,000 in cash for office cleaning services for the month.
j. Purchased additional office chairs for $5,800; received credit terms of 30 days.
k. Purchased office equipment for $40,000 and paid half of this amount in cash immediately; the balance is due in 30 days.
l. Issued a check for $9,400 to pay salaries.
m. Performed services for $14,500 in cash.
n. Performed services for $16,000 on credit.
o. Collected $8,000 on accounts receivable from charge customers.
p. Issued a check for $2,900 in partial payment of the amount owed for office chairs.
q. Paid $700 to a duplicating company for photocopy work performed during the month.
r. Paid $1,220 for the monthly electric bill.
s. Brock withdrew $9,000 in cash for personal expenses.
Analyze: What liabilities does the business have after all transactions have been recorded?

View Solution:

Sale on SolutionInn
  • CreatedAugust 08, 2014
  • Files Included
Post your question