On July 1, 2016, Pat Glenn established Half Moon Realty. Pat completed the follo
ID: 2487894 • Letter: O
Question
On July 1, 2016, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July.
1. Indicate the effect of each transaction and the balances after each transaction, using the tabular headings. In each transaction row (rows indicated by a letter), you must indicate the math sign (+ or -) in columns affected by the transaction. You will not need to enter math signs in the balance rows (rows indicated by Bal.). Entries of 0 (zero) are not required and will be cleared if entered.
2. Prepare an income statement for July 31. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Refer to the list of Accounts on the accounting equation grid and the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. You will not need to enter colons (:) on the income statement.
Half Moon Realty
Income Statement
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2. Prepare a statement of owner’s equity for the month ended July 31, 2016. If a net loss has been incurred or there has been a decrease in owner’s equity, enter that amount as a negative number using a minus sign. Refer to the list of Accounts on the accounting equation grid and the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.
Half Moon Realty
Statement of Owner’s Equity
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2. Prepare a balance sheet as of July 31, 2016. Refer to the list of Accounts on the accounting equation grid and the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.
Half Moon Realty
Balance Sheet
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Assets
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Liabilities
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Owner’s equity
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A. Opened a business bank account with a deposit of $25,000 from personal funds. B. Purchased office supplies on account, $1,850. C. Paid creditor on account, $1,200. D. Earned sales commissions, receiving cash, $41,500. E. Paid rent on office and equipment for the month, $3,600. F. Withdrew cash for personal use, $4,000. G. Paid automobile expenses (including rental charge) for month, $3,050, and miscellaneous expenses, $1,600. H. Paid office salaries, $5,000. I. Determined that the cost of supplies on hand was $950; therefore, the cost of supplies used was $900.Explanation / Answer
1. Journal Assets = Liabilities + Owner’s Equity Pat Pat Accounts Glenn, Glenn, Sales Salaries Rent Auto Supplies Miscellaneous Cash + Supplies Payable + Capital - Drawing + Commissions - Expense - Expense - Expense - Expense - Expense a. 25,000 25,000 b. 1,850 1,850 Bal. 25,000 1,850 1,850 25,000 - - - - - - - c. (1,200) (1,200) Bal. 23,800 1,850 650 25,000 - - - - - - - d. 41,500 41,500 Bal. 65,300 1,850 650 25,000 - 41,500 - - - - - e. (3,600) (3,600) Bal. 61,700 1,850 650 25,000 - 41,500 - (3,600) - - - f. (4,000) (4,000) Bal. 57,700 1,850 650 25,000 (4,000) 41,500 - (3,600) - - - g. (4,650) (3,050) (1,600) Bal. 53,050 1,850 650 25,000 (4,000) 41,500 - (3,600) (3,050) - (1,600) h. (5,000) (5,000) Bal. 48,050 1,850 650 25,000 (4,000) 41,500 (5,000) (3,600) (3,050) - (1,600) i (900) (900) Bal. 48,050 950 650 25,000 (4,000) 41,500 (5,000) (3,600) (3,050) (900) (1,600) B. Income Statement $ Sales & Commission 41500 Less- Salaries -5000 Less:- Rent -3600 Less:- Automobile Exp -3050 Less:- Supplies -900 Less:- Misc exp -1600 Net Income 27350 C. Owners Equity $ Capital 25000 Less:- Drawing -4000 Add:- net income 27350 Owner's equity 48350 D. balance Sheet Liabilities amount Asset Amount Owner's Equity 48350 Cash 48050 Account payable 650 Supplies 950 49000 49000
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