P1-2A Judi Salem opened a law office on July 1, 2017, On July 31, the balance sh

Question

P1-2A Judi Salem opened a law office on July 1, 2017, 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 trans- actions occurred 1. Collected $1,200 ofaccounts receivable 2. Paid $2,800 cash on accounts payable 3. Recognized revenue of $7,500 of which $3,000 is collected in cash and the balance is due in September 4 Purchased additional equipment for $2,000, paying $400 in cash and the balance on 5. Paid salaries $2,500, rent for August $900, and advertising expenses $400 account

Explanation / Answer

a) Tabular analysis of the August transactions (Amount in $)

b) Income Statement for August 31 (Amount in $)

Owner"s Equity for August (Amount in $)

Balance Sheet as on August 31, 2017 (Amount in $)

Particulars Cash + Accounts Receivable + Supplies + Equipment = Notes Payable + Accounts Payable + Owner's Capital - Owner's Drawings + Revenues - Expenses Balance as on July 31 5,000 + 1,500 + 500 + 6,000 = 0 + 4,200 + 8,800 - 0 + 0 - 0 Transaction 1 1,200 -1,200 Transaction 2 -2,800 -2,800 Transaction 3 3,000 4,500 7,500 Transaction 4 -400 2,000 1,600 Transaction 5 (Salaries) -2,500 2,500 Rent -900 900 Advertising expenses -400 400 Transaction 6 -700 700 Transaction 7 2,000 2,000 Transaction 8 (Utility expense) 270 270 Total balance as on August 31 3,500 + 4,800 + 500 + 8,000 = 2,000 + 3,270 + 8,800 - 700 + 7,500 - 4,070

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