CHAPTER- 01
ASSIGNMENT
P1-1A Threet’s Repair Shop was started on May 1 by Erica Threet. A summary of May
transactions is presented below.
1. Invested $10,000 cash to start the repair shop.
2. Purchased equipment for $5,000 cash.
3. Paid $400 cash for May office rent.
4. Paid $500 cash for supplies.
5. Incurred $250 of advertising costs in the Beacon News on account.
6. Received $6,100 in cash from customers for repair service.
7. Withdrew $1,000 cash for personal use.
8. Paid part-time employee salaries $2,000.
9. Paid utility bills $170.
10. Provided repair service on account to customers $750.
11. Collected cash of $120 for services billed in transaction (10).
Instructions
(a) Prepare a tabular analysis of the transactions, using the following column headings: Cash,
Accounts Receivable, Supplies, Equipment, Accounts Payable, Owner’s Capital, Owner’s
Drawings, Revenues, and Expenses.
(b) From an analysis of the owner’s equity columns, compute the net income or net loss for
May.
(a) Total assets $13,280
(b) Net income $4,030
P1-2A Ramona Castro opened a veterinary business in Nashville, Tennessee, on August 1.
During September, the following transactions occurred.
1. Paid $2,900 cash on accounts payable.
2. Collected $1,300 of accounts receivable.
3. Purchased additional office equipment for $2,100, paying $800 in cash and the balance on
account.
4. Earned revenue of $7,800, of which $2,500 is received in cash and the balance is due in
October.
5. Withdrew $1,100 cash for personal use.
6. Paid salaries $1,700, rent for September $900, and advertising expense $450.
7. Incurred utilities expense for month on account $170.
8. Received $10,000 from Capital Bank (money borrowed on a note payable).
Instructions
(a) Prepare a tabular analysis of the September transactions.
The column headings should be as follows: Cash, Accounts Receivable, Supplies,
Equipment, Notes Payable, Accounts Payable, Owner’s Capital, Owner’s Drawings,
Revenues and Expenses.
(b) Prepare an income statement for September, an owner’s equity statement for September, a
balance sheet and a Cash flow statement at September 30.
P1-4A Gordon Beckham started his own delivery service, Beckham Deliveries, on June 1, 2012.
The following transactions occurred during the month of June.
June 1 Gordon invested $10,000 cash in the business.
2 Purchased a used van for deliveries for $12,000. Gordon paid $2,000 cash and signed
a note payable for the remaining balance.
3 Paid $500 for office rent for the month.
5 Performed $4,400 of services on account.
9 Withdrew $200 cash for personal use.
12 Purchased supplies for $150 on account.
15 Received a cash payment of $1,250 for services provided on June 5.
17 Purchased gasoline for $200 on account.
20 Received a cash payment of $1,300 for services provided.
23 Made a cash payment of $600 on the note payable.
26 Paid $250 for utilities.
29 Paid for the gasoline purchased on account on June 17.
30 Paid $1,000 for employee salaries.
Instructions
(a) Show the effects of the previous transactions on the accounting equation using the following
format.
Assets Liabilities Owner’s
Equity
Accounts Notes Accounts Owner’s Owner’s
Date Cash + Receivable + Supplies + Equipment = Payable + Payable + Capital - Drawings +
Revenues – Expenses
(b) Prepare an income statement for the month of June.
(c) Prepare a balance sheet at June 30, 2012.
(d) Prepare Cash flow statement.
(a) Total assets $23,100
(b) Net income $3,750
(c) Cash $7,800
