P1-42 Carl Redmon completed these transactions during the first half of December
ID: 2434602 • Letter: P
Question
P1-42 Carl Redmon completed these transactions during the first half of December:
Dec. 2
Invested $10,000 to start a consulting practice titled Redmon Consulting.
2
Paid monthly office rent, $500.
3
Paid cash for a Dell computer, $2,000. This equipment is expected to remain in service for five years.
4
Purchased office furniture on account, $3,600. The furniture should last for five years.
5
Purchased supplies on account, $300.
9
Performed consulting service for a client on account, $1,700.
12
Paid utility expenses, $200.
18
Performed service for a client and received cash of $800.
(Horngren. Accounting, 7th Edition. Pearson Learning Solutions 5.12.5).
# P1-42.1 Analysis of Transactions, Carl Redman Consulting Dec-07 Assest Liability Dates Cash A/R Supplies Equipment Furniture A/P C.R Capital Transactions 1 12/2/07 $10,000.00 $10,000.00 Investment 2 $(500.00) $(500.00) Rent $9,500.00 $9,500.00 TOTAL 3 12/3/07 $(2,000.00) $2,000.00 $(2,000.00) Dell $7,500.00 $7,500.00 TOTAL 4 12/4/07 $3,600.00 $3,600.00 On Acct. Furniture 5 12/5/07 $300.00 $300.00 On Acct. Supplies 6 12/9/07 $1,700.00 $1,700.00 Svc. Revenue $9,200.00 TOTAL 7 12/12/07 $(200.00) $(200.00) Utilities $9,000.00 TOTAL 8 12/18/07 $800.00 $800.00 Svc. Revenue $8,100 $9,800.00 TOTAL $1,700.00 Total $9,800.00 P1-42.2 Redman Consulting Income Statement Month End December 31, 2007 Revenue: Service Revenue $2,500.00 Expenses: Dell Computer $2,000.00 Rent $500.00 Utilities $200.00 Total Expenses $2,700.00 ($200.00) Net Income P1-42.3 Redman Consulting Statement of Equity Month End December 31, 2007 Redman Consulting, Capital, 12/1/07 $- Add: Investment by Owner $10,000.00 Net Income for the Month ($200.00) Total $9,800.00 Less Withdrawl by Owner $- Redman Consulting Capital 12/31/07 $9,800.00 P1-42.4 Redman Consulting Balance Sheet Month End December 31, 2007 Assets Liabilities Cash $8,100.00 Accounts Payables $6,600.00 Accounts Receivables $1,700.00 Supplies $300.00 Owners Equity $9,800.00 Furniture $3,600.00 Equipment $2,000.00 Redman Capital $16,400.00 Total Assets $15,700.00 Total Liabilities + Owners Equity NOTE: I am off $700 dollars I do not understand. I need more guidance. It is like the rent and utilities are thrwing the balance off. Then I looked up the answers in the back and it appears I am off completely. Can I have some guidance as to what I am doing exactly wrong?Explanation / Answer
Redman consultancy Income statement $ $ Consultation fees(1700+800) 2500 Less: Rent 500 Utilities 200 700 Net income 1800 Cash Capital 10000 consultancy charges 800 Total cash 10800 Less:Payments Computer 2000 Rent 500 Utilities 200 2700 Balance of cash at the end 8100 Redman consultancy Balance sheet as on December 31 Assets cash 8100 Accounts receivables 1700 Furniture 3600 Computer 2000 Supplies 300 15700 Liabilities capital 10000 Add: net income 1800 11800 Accounts payable for furniture 3600 for supplies 300 3900 15700
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