SOLVE THE FOLLOWING IN COMPLETE SOLUTION STEP BY STEP.

THE BALANCE SHEET - Shows the financial condition of the business. - It follows the format of the accounting equation. - The balance sheet is affected whenever there is a transaction. MR Lee BALANCE SHEET Assets Liabilities and Capital Cash P 215,000 Accounts Payable to Bank P100,000 Land 300,000 Mr. LEE Capital 400,000 Add: Profit 15,000 415,000 Total Assets P 515,000 Total Liabilities and Capital P515,0004n INCOME STATEMENT -It is an itemized statement summarizing the changes in proprietorship resulting from the business operations between dates. -It follows the format of the profit equation. I . ell-"III! PlOfII' = Income] Revenue - Expenses -The purpose is to provide the owner/s with information regarding the progress of the business at regular intervals (month, quarter, semester. or year). -Most companies use the year as the accounting period. Mr. Lee Income Statement Income P20,000 Less: Salary Expense 5.9312 Net Income/Profit Pl 5,000 1. Record the effect of the following transactions on the accounting equation using a table similar to the example. Owen inherited $20,000 and invested the cash in the business. Performed services for a client and received cash of $700. a. b c Purchased supplies on account, $1,000 d. Invested personal cash of $1,000 in the business. 2. f 9 Performed services to clients and received cash of $2,400 Paid office rent expenses, $ 900 and advertising expense $100. Withdrew cash of $1,800 for personal use. Prepare Income Statement and Balance Sheet