Problem 1

PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing Problem # 1 Alfred Mcdonald opened a law office, Alfred Mcdonald, Attorney at Law, on July 1, 2017. On July 31, the balance sheet showed Cash $25,000, Accounts Receivable $3,000, Supplies $1,000, Office Equipment $12,000, Accounts Payable $13,400, and Owner's Capital $27,600. During August the following transactions occurred. 1. Collected $2,800 of accounts receivable. 2. Paid $5,400 cash on accounts payable. 3. Recognized revenue of $12,,000 of which $4,000 is collected in cash and the balance is due in September. 4. Purchased additional equipment for $1,000, paying $300 in cash and the balance on account. 5. Paid salaries $8,500, rent for August $3,800, and advertising expenses $1,700 6. Withdrew $1,200 in cash for personal use. 7. Received $5,000 in advance of providing the service to client. 8. Incurred utility expenses for month on account $1,100. Instructions 1. (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, Unearned Revenue, Accounts Payable, Owner's Capital, Owner's Drawings, Revenues, Expenses. (46 points) 2. (b) Prepare an income statement for August, an owner's equity statement for August, and a balance sheet at August 31. (Each financial statement is worth 12 points) NOTE: THE NEXT TWO PAGES ARE BLANK JUST IN YOU DECIDE TO PEPARE THE FINANCIAL STATEMENTS IN A WORD DOCUMENT. AN EXCEL SPREADSHEET IS ATTACHED SEPARATELY JUST IN YOU DECIDE TO PREPARE THE TRANSACTIONS AND/OR FINANCIAL STATEMENTS IN EXCEL