| On October 1, Thomas Edison organized Edison Consulting, on October 3, the owner contributed $75,000 cash. On October 31, the company's records show the following items and amounts. Use this information to prepare the following statements: Income Statement, Statement of Owner's Equity, Balance Sheet, and Statement of Cash Flows
|
| Cash | $12,000 | Owner Withdrawals | $2,500 |
| Accounts Receivable | $24,000 | Consulting Fees Earned | $25,000 |
| Office Supplies | $1,200 | Rent Expense | $4,500 |
| Land | $30,000 | Salaries Expense | $12,000 |
| Office Equipment | $15,000 | Telephone Expense | $250 |
| Accounts Payable | $1,950 | Miscellaneous Expenses | $500 |
| Owner Investments | $75,000 |
| Income Statement for the Month Ended October 31 |
| Revenues: |
| Consulting Fees Earned |
| Expenses: |
| Rent Expense |
| Salaries Expense |
| Telephone Expense |
| Miscellaneous Expense |
| Total Expenses |
| Net Income (loss) |
| Statement of Owner's Equity for the Month Ended October 31 |
| Edison, Capital October 1 | $0 |
| Add: |
| Investment by Owner |
| Net Income |
| Less: |
| Withdrawals by Owner |
| Net Loss |
| Edison, Capital, October 31 |
| Balance Sheet as of October 31 |
| Assets | Liabilities |
| Cash | Accounts Payable |
| Accounts Receivable |
| Office Supplies |
| Land | Owner's Equity |
| Office Equipment | Edison, Capital |
| Total Assets | Total Liabilities and Equity |
| Statement of Cash Flows for the Month Ended October 31 |
| Assume the following when preparing the Statement of Cash Flows: |
| A. The owner's initial investment consists of $45,000 in Cash and $30,000 in Land. |
| B. The company's $15,000 equipment purchase is paid in Cash. |
| C. The company's revenue consists of $1,000 in Cash and $24,000 in Accounts Receivable. |
| D. The company's Accounts Payable consists of the $1,200 Office Supplies purchase and the $250 Telephone and $500 Miscellaneous Expenses |
| E. The company's Rent and Salaries Expense is paid in Cash. |
| Cash flows from operating activities |
| Cash received from customers |
| Cash paid to employees |
| Cash paid for rent |
| Cash paid for telephone expenses |
| Cash paid for miscellaneous expenses |
| Net cash used by operating activities |
| Cash flows from investing activities |
| Cash paid for office equipment |
| Net cash used by investing activities |
| Cash flows from financing activities |
| Investments by owner |
| Withdrawals by owner |
| Net cash provided by financing activities |
| Net increase in cash |
| Cash balance, July 1 | $0 |
| Cash balance, July 31 | $12,000 |
| First, prepare general journal entries for the following transactions of Mater Consulting. Second, prepare T-Accounts (ledger) for the same transactions. Third, prepare a trail balance based on the same transactions. |
| June | 1 | Mater, the owner, invested $50,000 cash and $50,000 in office equipment. |
| 4 | The company paid $20,000 cash for an insurance policy covering the next 24 months |
| 15 | The company purchased office supplies for $800 cash |
| 20 | The company received $30,000 in consulting fees earned. |
| 30 | The company paid $1,000 for June utilities. |
| General Journal Entries: |
| June | 1 |
| 4 |
| 15 |
| 20 |
| 30 |
| T-Accounts: |
| Cash | Office Equipment | Utilities |
| Consulting Fees | Insurance Expense | Office Supplies |
| Owners, Capital |
| Trail Balance: |
| Account Name: | Debit | Credit |
| Cash |
| Office Equipment |
| Utilities |
| Consulting Fees |
| Insurance Expense |
| Office Supplies |
| Owners, Capital |
| Totals | $130,000 | $130,000 |
| The Adjusted Trial Balance for Company follows. Complete the work sheet by extending the account balances into the appropriate financial statement columns and by entering the amount of net income for the reporting period. |
| Balance Sheet & |
| Adjusted | Income | Statement of |
| Trail Balance | Statement | Owner's Equity |
| No. | Account | DR | CR | DR | CR | DR | CR |
| 101 | Cash | $10,000 |
| 106 | Accounts Receivable | $250,000 |
| 107 | Inventory | $50,000 |
| 153 | Trucks | $5,000 |
| 154 | Accum Depr - Trucks | $10,000 |
| 183 | Land | $40,000 |
| 201 | Accounts Payable | $15,000 |
| 209 | Salaries Payable | $5,000 |
| 233 | Unearned Fees | $5,000 |
| 301 | Owner, Capital | $100,000 |
| 302 | Owner, Withdrawals | $15,000 |
| 401 | Plumbing Fees Earned | $305,000 |
| 611 | Depr Expense - Trucks | $10,000 |
| 622 | Salaries Expense | $40,000 |
| 640 | Rent Expense | $15,000 |
| 677 | Misc. Expense | $5,000 |
| Totals | $440,000 | $440,000 |
| Net Income |
| Totals |
| Using your accounting knowledge, fill in the following separate income statements a through e. Identify any negative amount by putting it in parentheses. |
| Statements: | a | b | c | d | e |
| Sales | $100,000 | $805,000 | $450,000 | $100,000 |
| Cost of goods sold |
| Merchandise inventory (beginning) | $10,000 | $0 | $100 | $80,000 | $25,000 |
| Total Cost of merchandise purchases | $30,000 | $10,000 |
| Merchandise inventory (ending) | $10,000 | ($10) | ($50,000) |
| Cost of goods sold | $30,000 | $290,000 | $90 | $25,000 |
| Gross Profit | $320,000 |
| Expenses | $10,000 | $150,000 | $1,000 | $400,000 | $50,000 |
| Net Income (loss) | $365,000 | $910 | ($80,000) |
| On May 5, Hill Company sold 1,500 of the units for $20 per unit to Bunker Co. Terms of the sale were 2/10 n/60. Prepare entries for Hill Company to record the May 5 sale and each of the following separate transactions A through C using a perpetual inventory system. Please note that the inventory cost or value is $10 per unit. |
| A. On May 7, Bunker returns 200 units because they did not fit the customer's needs Hill Company restores the units to its inventory. |
| B. On May 8, Bunker discovers 300 units are damaged but are still of some use and, therefore, keeps the units. Hill Company sends Bunker a credit memorandum for $1,000 to compensate for the damage. |
| C. On May 15, Bunker discovers that 100 units are the wrong color. Bunker keeps 60 of these units because Hill Company sends a $200 credit memorandum to compensate. Bunker returns the remaining 40 units to Hill Company. Hill Company restores the 40 returned units to its inventory. |
| Journal Entries: |
| May | 5 |
| Notes- |
| 5 |
| Notes- |
| May | 7 |
| Notes- |
| 7 |
| Notes- |
| May | 8 |
| Notes- |
| May | 15 |
| Notes- |
| 15 |
| Notes- |
Monkeydluffy
Accounting101.xlsx
