P1- 2B Juanita Pierre opened a law office, on July 1,2012. On July 31, the balan
ID: 2332838 • Letter: P
Question
P1- 2B Juanita Pierre opened a law office, on July 1,2012. On July 31, the balance sheet showed Cash $5,000, Accounts Receivable $1,500, Supplies $500, Equipment $6,000, Accounts Payable $4,200, and Owner's Capital $8,800. During August, the following transactions occurred 1. Collected $1,200 of accounts receivable. 2. Paid $2,800 cash on accounts payable. 3. Earned revenue of $7,500 of which $3,000 is collected in cash and the balance is due in Septembe:r 4. Purchased additional office equipment for $2,000, paying $400 in cash and the balance on account 5. Paid salaries $2,500, rent for August $900, and advertising expenses $400. 6. Withdrew $700 in cash for personal use. 7. Received $2,000 from Standard Federal Bank- money borrowed on a note payable. 8. Incurred utility expenses for month on account $270 Instructions (a) Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column headings should be as follows Cash+Accounts Recenable+ Suppfies+Equipment-Nates Payable+ Accounts Payable+wner's Capital-Owner's Drawings+Revemes-Expense sheet at August 31 (b) Prepare an income statement for August, an owner's equity statement for August, and a balanceExplanation / Answer
Cash
Accounts Receivable
Description
Debit
Credit
Balance
Description
Debit
Credit
Balance
Beginning balance
$5,000
$5,000
Beginning balance
$1,500
$1,500
Accounts Receivable
$1,200
$6,200
Cash
$1,200
$300
Accounts Payable
$2,800
$3,400
Revenue
$4,500
$4,800
Revenue
$3,000
$6,400
Ending Balance
$4,800
$4,800
Office Equipment
$400
$6,000
Totals
$6,000
$6,000
Salaries Expense
$2,500
$3,500
Rent Expense
$900
$2,600
Supplies
Advertising Expense
$400
$2,200
Description
Debit
Credit
Balance
Capital
$700
$1,500
Beginning balance
$500
$500
Short-term Note Payable
$2,000
$3,500
Ending Balance
$3,500
$3,500
Ending balance
$500
$500
$11,200
$11,200
Totals
$500
$500
Equipment
Notes Payable
Description
Debit
Credit
Balance
Description
Debit
Credit
Balance
Beginning balance
$6,000
$6,000
Beginning balance
Cash
$400
$6,400
Cash
$2,000
$2,000
Accounts Payable
$1,600
$8,000
Ending Balance
$2,000
$2,000
Ending Balance
$8,000
$8,000
Totals
$2,000
$2,000
Totals
$8,000
$8,000
Accounts Payable
Owner's Capital
Description
Debit
Credit
Balance
Description
Debit
Credit
Balance
Beginning balance
$4,200
$4,200
Beginning balance
$8,800
$8,800
Cash
$2,800
$1,400
Equipment
$1,600
$3,000
Ending Balance
$8,800
$8,800
Ending Balance
$3,000
$3,000
Totals
$8,800
$8,800
Totals
$5,800
$5,800
Revenue
Owner's Drawings
Description
Debit
Credit
Balance
Description
Debit
Credit
Balance
Cash
$3,000
$3,000
Beginning balance
$0
$0
Accounts Receivable
$4,500
$7,500
Cash
$700
$700
Ending Balance
$7,500
$7,500
Ending balance
$700
$700
Totals
$7,500
$7,500
Total
$700
$700
Rent Expense
Salaries Expense
Description
Debit
Credit
Balance
Description
Debit
Credit
Balance
Beginning balance
$0
$0
Beginning balance
$0
$0
Cash
$900
$900
Cash
$2,500
$2,500
Ending balance
$900
$900
Ending balance
$2,500
$2,500
Totals
$900
$900
Totals
$2,500
$2,500
Utility Expense
Advertising Expense
Description
Debit
Credit
Balance
Description
Debit
Credit
Balance
Beginning balance
$0
$0
Beginning balance
$0
$0
Utility Payable
$270
$270
Cash
$400
$400
Ending balacne
$270
$270
Ending balance
$400
$400
Totals
$270
$270
Totals
$400
$400
Utility Payable
Description
Debit
Credit
Balance
Beginning balance
$0
$0
Utility Expense
$270
$270
Ending balance
$270
$270
Totals
$270
$270
Income Statement for the Month ended August 31
Revenues
$7,500
Expenses:
Salaries Expense
$2,500
Rent Expense
$900
Advertising expense
$400
Utility expense
$270
Total expenses
$4,070
Net Income
$3,430
Statement of Owner's Equity for the month ended August 31
Juanita Pierre Capital, July 31
$8,800
Net Income
$3,430
Subtotal
$12,230
Withdrawals during the month
$700
Juanita Pierre Capital, Aug 31
$11,530
Balance Sheet at August 31
Assets
Cash
$3,500
Accounts Receivable
$4,800
Supplies
$500
Equipment
$8,000
Total
$16,800
Liabilities
Accounts Payable
$3,000
Note Payable
$2,000
Utility Payable
$270
Owner's Capital
$11,530
Total
$16,800
Cash
Accounts Receivable
Description
Debit
Credit
Balance
Description
Debit
Credit
Balance
Beginning balance
$5,000
$5,000
Beginning balance
$1,500
$1,500
Accounts Receivable
$1,200
$6,200
Cash
$1,200
$300
Accounts Payable
$2,800
$3,400
Revenue
$4,500
$4,800
Revenue
$3,000
$6,400
Ending Balance
$4,800
$4,800
Office Equipment
$400
$6,000
Totals
$6,000
$6,000
Salaries Expense
$2,500
$3,500
Rent Expense
$900
$2,600
Supplies
Advertising Expense
$400
$2,200
Description
Debit
Credit
Balance
Capital
$700
$1,500
Beginning balance
$500
$500
Short-term Note Payable
$2,000
$3,500
Ending Balance
$3,500
$3,500
Ending balance
$500
$500
$11,200
$11,200
Totals
$500
$500
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