Lena Gold began a professional practice on June 1 and plans to prepare financial statements at the
a. Owner invested $50,000 cash in the company along with equipment that had a $10,000 market value.
b. The company paid $1,600 cash for rent of office space for the month.
c. The company purchased $12,000 of additional equipment on credit (payment due within 30 days).
d. The company completed work for a client and immediately collected the $2,000 cash earned.
e. The company completed work for a client and sent a bill for $7,000 to be received within 30 days.
f. The company purchased additional equipment for $8,000 cash.
g. The company paid an assistant $2,400 cash as wages for the month.
h. The company collected $5,000 cash as a partial payment for the amount owed by the client in transaction
i. The company paid $12,000 cash to settle the liability created in transaction c.
j. Owner withdrew $500 cash from the company for personal use.
Create a table like the one in Exhibit 1.9, using the following headings for columns: Cash; Accounts Receivable; Equipment; Accounts Payable; L. Gold, Capital; L. Gold, Withdrawals; Revenues; and Expenses. Then use additions and subtractions to show the effects of the transactions on individual items of the accounting equation. Show new balances after each transaction.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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