Craig Fisher started a lawn service called Craigs Quick Cut to earn money over the summer months.

Question:

Craig Fisher started a lawn service called Craig’s Quick Cut to earn money over the summer months. Fisher has decided to use the following accounts for recording transactions:

Assets Revenue

Cash Lawn Fees

Accounts Receivable Expenses

Mowing Equipment Rent Expense

Lawn Tools Wages Expense

Liabilities Telephone Expense

Accounts Payable Gas and Oil Expense

Notes Payable Transportation Expense

Owner’s Equity

Craig Fisher, Capital

Craig Fisher, Drawing

Transactions for the month of June are listed below.

(a) Invested cash in the business, $3,000.

(b) Bought mowing equipment for $1,000: paid $200 in cash and promised to pay the balance over the next four months.

(c) Paid garage rent for June, $50.

(d) Provided lawn services for customers on account, $520.

(e) Paid telephone bill, $30.

(f) Borrowed cash from the bank by signing a note payable, $500.

(g) Bought lawn tools, $480.

(h) Collected cash from customers for services performed on account in transaction

(d), $400.

(i) Paid associates for lawn work done during the first half of the month, $350.

(j) Paid for gas and oil for the equipment, $60.

(k) Paid cash on account for the mowing equipment purchased in transaction (b), $200.

(l) Earned lawn fees of $1,320: $600 in cash and $720 on account.

(m) Paid associates for last half of month, $700.

(n) Reimbursed associates for costs incurred using their own vehicles for transportation, $150.

(o) Paid on note payable to bank, $100.

(p) Withdrew cash for personal use, $200.

REQUIRED

1. Enter the transactions for June in T accounts. Use the accounting equation as a guide for setting up the T accounts.

2. Foot and balance the T accounts where necessary.

3. Prepare a trial balance of the accounts as of June 30, 20--.

4. Prepare an income statement for the month ended June 30, 20--.

5. Prepare a statement of owner’s equity for the month ended June 30, 20--.

6. Prepare a balance sheet as of June 30, 20--.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Fantastic news! We've located the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

College Accounting

ISBN: 978-0538745192

20th Edition

Authors: Heintz and Parry

Question Posted: