lab work asset ,liability and equity

8:53 E Week 1 Lab Work.docx Demonstration Problem - Chapter 1 Recording Business Activities and Preparing Financial Statements Need to Know - Please study the following entire Descentration Problem and Solution solutions page 5 & 6) as you will be responsible to know how to do this on your own Instructions: First read the questions and answers. Next attempt to complete the Requirements 1-4 on your own. You can check the answers as you go to make sure you are doing it correctly and and the process I have given you a blank chart for Requirement to be completed. For the financial Statements you can create your own in the space provided below. Reminder-weekly attendance credits are based on completing all Learning Components and Learning Activities in full and on time DEMONSTRATION PROBLEM After several months of planning, Jounine Cardinal started a haircutting business called The Cutlery. The following business activities occurred during its first month, August 2017: 2. On August 1, Cardinul put $16,000 cash into a choquing account in the name of The Cutlery. She also invested $10,000 of equipment that she already owned b. On August 2, she paid $2,000 cash for furniture for the shop c. On August 3, she paid $3.200 cash to rent space in a strip mall for August d. On August 4, she equipped the shop by installing the old equipment and some new quipment that she boughton credit for $21.000. This amount is to be repaid in three equal payments at the end of August, September, and October c. On August S. The Cutlery opened for business. Receipts from services provided for cash in the first week and a half of business (ended August 15) were $1,100 1. On August 15, Cardinal provided cutting services on account for 5750 3. On August 17. Cardinal received a $750 chaque in the mail for services previously rendered on account h. On August 17. Cardinal paid wages of $250 to an at for working during the grand opening On August 18. Cardinal interviewed a job applicant. The applicant was successful in getting the position and will receive 5750 per week for part-time work starting in September Cisl receipts from services provided during the second half of Anu was $1.950 On Aug 31. Cardinal paidan maliment on the account payable Week 1 Lab Work.docx DEMONSTRATION PROBLEM After several months of planning, Joanne Cardinal started a haircutting business called The Cutlery. The following business activities occurred during its first month, August 2017 a. On August 1, Cardinal put $16,000 cash into a chequing account in the name of The Cutlery. She also invested $10,000 of equipment that she already owned. b. On August 2, she paid $2,000 cash for furniture for the shop c. On August 3, she paid $3,200 cash to rent space in a strip mall for August d. On August 4, she equipped the shop by installing the old equipment and some new equipment that she bought on credit for 521,000. This amount is to be repaid in three cqual payments at the end of August, September, and October e. On August 5, The Cutlery opened for business. Receipts from services provided for cash in the first week and a half of business (ended August 15) were $1,100. 1. On August 15, Cardinal provided haircutting services on account for $750 g. On August 17, Cardinal received a $750 cheque in the mail for services previously rendered on account h. On August 17, Cardinal paid wages of $250 to an assistant for working during the grand opening, 1. On August 18, Cardinal interviewed a job applicant. The applicant was successful in getting the position and will receive S750 per week for part-time work starting in September j. Cash receipts from services provided during the second half of August was $1.950 k. On August 31, Cardinal paid an installment on the account payable created in (d) 1. On August 31, the August hydro bill for $450 was received It will be paid on September 14 m. On August 31, Cardinal withdrew S500 cash for her personal use Required 1. Arrange the following asset, liability, and equity titles in table similar to the one in Exhibit 1.15: Cash: Accounts Receivable; Fumiture Store Equipment Accounts Payable, and Joanne Cardinal Capital Show the effects of cach transaction on the equation. Explain each of the changes in cquity 2. Prepare an income statement for August 3. Prepare a statement of changes in equity for August 4. Prepare a balance sheets of August 31 It will be paid on September 14. m. On August 31, Cardinal withdrew $500 cash for her personal use. Required 1. Arrange the following asset, liability, and equity titles in a table similar to the one in Exhibit 1.15: Cash: Accounts Receivable; Furniture, Store Equipment: Accounts Payable; and Joanne Cardinal, Capital. Show the effects of each transaction on the equation. Explain each of the changes in equity. 2. Prepare an income statement for August 3. Prepare a statement of changes in equity for August 4. Prepare a balance sheet as of August 31. Analysis Component: a. Identify how much of the assets held by The Cutlery are owned by the owner, Joanne Cardinal. b. How much of the total assets are financed by equity? By debt? Explain what it means to "finance assets by equity: and to "finance assets by debt." Planning the Solution Set up a table with the appropriate columns, including a final column for describing the transactions that affect equity. Identify and analyze each transaction and show its effects as increases or decreases in the appropriate columns. Be sure that the accounting equation remains in balance after each transaction. To prepare the income statement, find the revenues and expenses in the Explanation of Equity Transaction column. List those items on the statement, calculate the difference, and label the result as profit or loss. - Use the information in the Explanation of Equity Transaction column to prepare the statement of changes in equity Use the information in the last row of the table to prepare the balance sheet Prepare an answer to each part of the analysis component