Deliverable 2 - The Accounting Cycle

Robert Williams started a new business, Williams Lawn Service, on April 1, 2019. At the end of April, he wants to update his accounting records to reflect his first month of operations and prepare financial statements so he can see how he is doing. The following information can be seen in the widget on this page:

The following are the transactions of Williams Lawn Service, owned by Robert Williams, for the month of April 2019:

April 1

· Robert Williams invested $2,000 cash in his business.

April 15

· Robert provided lawn services and received cash amounting to $5,400 from

his customers.

April 16th

· Purchased supplies on account, $100.

April 17th

· Paid for gas and oil. $800.

April 18th

· Paid salaries, $5,000.

April 21st

· Provided services to a customer on credit, $600.

April 28th

· Robert provided lawn services and received cash of $6,000

April 29th

· Paid for truck and equipment rental $2,500.

April 20th

· Robert withdrew $2,000 for personal use.

In order to prepare his financial statements for the month of April, Robert will:

1. Record the above transactions in general journal form.

2 Prepare a trial balance.

3 Prepare an income statement from trial balance.

4.Prepare a statement of stockholders’ equity from the trial balance and income statement.

5.Prepare a balance sheet using the trial balance totals and the statement of owner’s equity.

This example demonstrates how the financial information flows from the transaction, to the journals, to the accounts and is used in the preparation of the financial statements that management uses to monitor the company’s financial operations.