Kensington Bike Repair Shop was started on April 1 by L. Depres. A summary of the April transactions follows: April 1 Invested $21,000 to start the repair shop.
2 Purchased equipment for $9,000, paying $3,000 cash and signing a note payable for the balance.
5 Paid rent for the month, $1,050.
7 Purchased $975 of supplies on account.
9 Received $3,200 in cash from customers for repair services.
16 Provided repair services on account to customers, $2,900.
26 Collected $1,200 on account for services billed on April 16.
27 Paid for supplies purchased on April 7.
28 Paid $290 for advertising.
29 Withdrew $1,300 for personal use.
30 Received April utility bill, $200.
30 Paid part-time employee salaries, $1,400.
30 Billed a customer $750 for repair services.
30 Received an advance from a customer for repairs to be performed in May, $2,100.
Instructions
(a) Prepare a tabular analysis of the effects of the above transactions on the accounting equation.
(b) From an analysis of the owner's equity, calculate the account balance in L. Depres, Capital at April 30.
TAKING IT FURTHER Assume on April 30 there is $500 of supplies on hand and that $475 of supplies had been used during April. What amount should be reported as an asset, Supplies, on the April 30 balance sheet? What amount should be reported as an expense?