Judy Johansen operates an interior design business, Johansen Designs. Listed below, in alphabetical order, are the company’s assets and liabilities as at December 31, 2024, and the revenues, expenses, and drawings for the year ended December 31, 2024:

Judy’s capital at the beginning of 2024 was $35,800. She made no investments during the year.

Instructions

Prepare an income statement, statement of owner’s equity, and balance sheet.

Taking It Further

Why is the balance sheet prepared after the statement of owner’s equity?

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Accounts payable Accounts receivable Cash Equipment Furniture Insurance expense Interest expense J. Johansen, drawings Notes payable $ 6,590 6,745 11,895 9,850 15,750 1,800 350 40,000 7,000 Prepaid insurance Rent expense Salaries expense Service revenue Supplies Supplies expense Telephone expense Unearned revenue Utilities expense $ 600 18,000 70,500 132,900 675 3,225 3,000 2,500 2,400