Below are account balances for Harrington Security Services as of the end of the

Question

Below are account balances for Harrington Security Services as of the end of the year in 2015. At the beginning of the year, the owner's equity was $38,000. During the year, Harrington (the owner) contributed $19,000 and withdrew $32,000.

Based on this information, prepare a balance sheet for Harrington Security Services. Make sure to show supporting calculations for the missing amount for Harrington, Capital.

Accounts Payable S 6,400 Accounts Receivable 9,400 Cash Equipment Harrington, Capital Rent Expense Salaries Expns 28,900 Service Revenue Supplies Utilites Expense 22,800 42,900 10,800 91,600 1,600 6,600

Explanation / Answer

Harrington Capital at end of 2015 = Harrington capital at beginning of the year + Contribution towards capital - withdrawl from capital + profit earned during the year

= 38000 + 19000 - 32000 + 43700

= 68700

Alternatively,

Capital = Assets - Liabilities

= [Accounts receivable + Cash + Equipment] - Accounts payable

= [9400 + 22800 + 42900] - 6400

= 68700

Harrington profit and loss account Service recenue 91600 Less- Rent expenses 10800 Salaries expenses 28900 Supplies 1600 Utilities Expense 6600 Profit contributed towards capital 43700

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