AI Fang opened a law office on July 1, 2020. On July 31, the statement of financial position showed Cash 5,000, Accounts Receivable 1,500, Supplies 500, Equipment 6,000, Accounts Payable 4,200, and Owners Capital 8,800 (amounts in thousands). During August, the following transactions occurred.1. Collected 1,200 of accounts receivable.2. Paid 2,800 cash on accounts payable.3. Recognized revenue of 7,500 of
AI Fang opened a law office on July 1, 2020. On July 31, the statement of financial position showed Cash ¥5,000, Accounts Receivable ¥1,500, Supplies ¥500, Equipment ¥6,000, Accounts Payable ¥4,200, and Owner’s Capital ¥8,800 (amounts in thousands). During August, the following transactions occurred.
1. Collected ¥1,200 of accounts receivable.
2. Paid ¥2,800 cash on accounts payable.
3. Recognized revenue of ¥7,500 of which ¥4,000 is collected in cash and the balance is due in September.
4. Purchased additional equipment for ¥2,000, paying ¥400 in cash and the balance on account.
5. Paid salaries ¥2,800, rent for August ¥900, and advertising expenses ¥400.
6. Withdrew ¥700 in cash for personal use.
7. Received ¥2,000 from Standard Bank—money borrowed on a note payable.
8. Incurred utility expenses for month on account ¥270.
a. Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column headings should be as follows: Cash + Accounts Receivable + Supplies + Equipment = Notes Payable + Accounts Payable + Owner’s Capital – Owner’s Drawings + Revenues – Expenses.
b. Prepare an income statement for August, an owner’s equity statement for August, and a statement of financial position at August 31.
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
This problem has been solved!
IFRS global edition
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt