Terrace Board Rentals was started on January 1, 2013, by Ryan Terrace with an investment of $50,000

Question:

Terrace Board Rentals was started on January 1, 2013, by Ryan Terrace with an investment of $50,000 cash. The company rents out snowboards and related gear from a small store. During the first 11 months, Terrace made additional investments of $20,000 and borrowed $40,000 from the bank. He did not withdraw any funds. The accounts, excluding Terrace's capital account, at November 30, 2013, are as follows:
Cash ..................................................................$45,000
Accounts Receivable ........................................ 15,000
Rental Gear ........................................................ 32,000
Rental Snowboards .......................................... 48,000
Store Equipment ............................................... 30,000
Accounts Payable ............................................. 12,000
Note Payable ..................................................... 40,000
The following transactions took place during the month of December 2013:
Dec. 1 The business paid $5,000 for the month's rent on the store space.
4 The business signed a one-year lease for the rental of additional store space at a cost of $4,000 per month. The lease is effective January 1. The business will pay the first month's rent in January.
6 Rental revenues for the week were: Gear, $4,000; Boards, $10,000. 75% of the fees were paid in cash and the rest on account.
10 The business paid the from November 30, 2013.
12 The business purchased gear for $20,000 and boards for $40,000, all on account.
13 Rental revenues for the week were: Gear, $7,000; Boards, $14,000. All the fees were paid in cash.
15 The company received payment for the owing at November 30, 2013.
18 The company purchased store equipment for $10,000 by paying $3,000 cash with the balance due in 60 days.
20 Rental revenues for the week were: Gear, $8,000; Boards, $14,000. Half the fees were paid in cash and half on account.
21 Terrace withdrew $7,000.
24 The company paid the balance owing for the purchases made on December 12.
27 Rental revenues for the week were: Gear, $6,000; Boards, $10,000. All the fees were paid in cash.
Dec. 27 The Company received payment for rental fees on account from December 6.
31 The company paid its employees for the month of December. The total wages expense was $10,000.
31 Terrace paid the utility bill for the month of December, which was $4,000.
Required
1. What is the total net income earned by the business over the period of January 1, 2013 to November 30, 2013?
2. Analyze the effects of the December 2013 transactions on the accounting equation of Terrace Board Rentals. Include the account balances from November 30, 2013.
3. Prepare the income statement for Terrace Board Rentals for the month ended December 31, 2013.
4. Prepare the statement of owner's equity for Terrace Board Rentals for the month ended December 31, 2013.
5. Prepare the for Terrace Board Rentals at December 31, 2013.
6. Terrace has expressed concern that although the business seems to be profitable and growing, he constantly seems to be investing additional money into it. Prepare a reply to his concerns.
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...