The following transactions were made during the first month of asole proprietor's business operation: 1. Mr. X
Question:
The following transactions were made during the first month of asole proprietor's business operation:
1. Mr. X started a grocery store. He invested $20,000 as initialinvestment.
2. He registered his business, paying $500 for registrationfee.
3. He paid $1,200 for store rent applicable for one year.
4. He incurred and paid $2,000 for the repair of the grocerystore.
5. He purchased merchandise for sale amounting to $20,000paying $15,000 with the balance to be paid after 60 days.
6. He paid $100 for the transportation of the merchandisepurchased.
7. He hired a saleslady for contract of $800 per month salary.
8. He sold $10,000 worth of merchandise for $16,000 for cash.
9. He sold $2,000 worth of merchandise for $35,000 on account.
10. He paid business taxes amounting to $460 during the month.
11. He paid $500 electricity expense during the month.
12. He paid the salary of his saleslady.
13. He paid 50% of this obligation to this supplier.
1.Determine what accounting element is affected by the business transactions, including their amounts.
2.How much is the total assets, liabilities, and owner’s equity at the end of the month?
3.Prepare the pro forma financial reports of the (a) Statement of Comprehensive Income, and (b) Statement of Financial Position.
Financial Accounting
ISBN: 978-0078025556
8th edition
Authors: Robert Libby, Patricia Libby, Daniel Short