One year ago, your friend Don Jenner founded Jenner Consulting Services. The business has prospered. Jenner, who

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One year ago, your friend Don Jenner founded Jenner Consulting Services. The business has prospered. Jenner, who remembers that you took an accounting course while in university, comes to you for advice. He wishes to know how much net income his business earned during the past year. He also wants to know what the entity's total assets, liabilities, and owner's equity are. The accounting records consist of the T-accounts of the company's ledger, which were prepared by a bookkeeper who moved to another city. The ledger at December 31, 2014, appears as follows:

Prepaid Rent Cash Accounts Receivable Dec. 31 18,540 Dec. 31 8,745 Jan. 2 9,200 Accumulated Amortization- Computer Equip

Jenner indicates that at the year's end customers owe the company $4,800 accrued service revenue, which he expects to collect early next year. These revenues have not been recorded. During the year, the company collected $11,195 service revenue in advance from customers, but the company earned only $1,800 of that amount. Rent expense for the year was $7,200, and the company used up $6,300 in supplies. Jenner estimates that amortization on the equipment was $17,700 for the year. At December 31, Jenner Consulting owes an employee $3,600 accrued salary.
Jenner expresses concern that his withdrawals during the year might have exceeded the business's net income. To get a loan to expand the business, Jenner must show the bank that Jenner Consulting's owner's equity has grown from its original $42,500 balance. Has it? You and Jenner agree that you will meet again in one week. You perform the analysis and prepare the financial statements to answer his questions.

Financial Statements
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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Accounting Volume 1

ISBN: 978-0132690096

9th Canadian edition

Authors: Charles T. Horngren, Walter T. Harrison, Jo Ann L. Johnston, Carol A. Meissner, Peter R. Norwood

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