Solution(a)

S. No 1 2 3 4 5 6 7 8 9 10 11 Total

Cash 10000 -5000 - - +610 -1000 -2000 - +120 7150

400 500 0 170
Account 75 -120 630
receivable 0
Equipment 5000 5000
Supplies 500 500
Totals 13280

Account payable 250 250

Owner’s Capital 10000 10000

Owner’s Drawing -1000 -1000

Revenues 6100 75 6850

0
Expenses - - -2000 - -2820
400 250 170
Totals 13280
Solution(b)
Revenue
Service revenue 6850

Expenses
Rent 400
Salaries 2000
Advertisement exp. 250
Utility bills 170
Total expenses 2820

Net income 4030

Solution(a)
S. No opening 1 2 3 4 5 6 7 8
Total

Cash 9000 -2900 +1300 -800 +2500 -1100 -3050 10000 14950

Account receivable 1700 -1300 +5300 5700

Equipment 6000 2100 8100
Supplies 600 600
Totals 29350

Notes payable 10000 10000

Account payable 3600 -2900 +1300 +170 2170

Owner’s Capital 13700 13700

Owner’s Drawing 1100 -1100

Revenues 7800 7800

Expenses -3050 -170 -3220

Totals 29350

Solution(b)
 Income statement
September 30,
Revenue
Service revenue 7,800
Expences
Salary 1,700
Rent 900
Advertisment 450
Utilities 170
Total expences
3,220
Net income 4,580

Owner’s equity statement

September 30,
Owner’s capital, Sep 1 13,700
Add: Investment 0
Net income 4,580
18,280
Less: Drawings 1,100
Owner’s capital, Sep 30 17,180
 Balance sheet
September 30,
Assets
Cash 14,950
Account receivable 5,700
Supplies 600
Equipments 8,100

Total assets 29,350

Liabalities & owner’s equity
Liabalities
Account payable 2,170
Note payable 10,000

Owner’s equity
Owner’ capital 17,180

Total liabalities & owner’s equity 29,350

Solution(a)

Alexei Ramirez Dayan company Viciedo company

company company
January 1,2012
Assets 95000 110000 120000 170,000
Liabilities 50000 65000 75000 80000
Owner’s equity 45000 60000 45000 90000
December 31, 2012
Assets 118000 141000 200000 242000
Liabilities 55000 75000 70000 80000
Owner’s equity 63000 66000 130000 162000
Owner’s equity charges in year
Additional investment 18000 15000 10000 15000
Drawings 25000 9000 14000 20000
Total revenues 350000 420000 476000 520000
Total expenses 320000 385000 342000 353000

Solution(b)
Owner’s equity statement
Ramirez company
Owner’s capital 0
Add: investment 15000
Net income
35000

Total 50000
Less: Drawings 9000

Owner’s equity at end 41000

Solution(c)
 Financial statement is the last step in accounting cycle. Financial statement is prepared in following order. This is
because calculation in one statement are needed in next.
1. Income statement
2. Owner’s equity statement
3. Balance sheet
Income statement is a statement that list revenues and expenses of a business far a specific period. It gives the net
income(profit/loss) of business.
Owner’s equity statement is a summary of owner investment in business. It shows owner’s capital and drawings.
Balance sheet includes everything that can’t go in income statement. It lists all assets, liabilities and owner’s equity .