P 1-1A

Assets = Liabilities + Stockholders' Equity

Trans- Accounts Accounts Common Retained Earnings
Cash + + Supplies + Equipment = + +
action Receivable Payable Stock Rev. - Exp. - Div.
(1) +10,000 +10,000 Issued Stock
(2) -5,000 +5,000
(3) -400 -400 Rent Expense
(4) -700 +700
(5) +250 -250 Advertisement Expense
(6) +4,700 +4,700 Service Revenue
(7) -1000 -1,000 Dividends
(8) -1,000 -1,000 Salary Expense
(9) -160 -160 Utilities Expense
(10) +980 +980 Service Revenue
(11) +120 -120
+6,560 +860 +700 +5,000 +250 +10,000 +5,680 -1,810 -1,000
13,120 13,120

Net Income +3,870

* Notes
1. Stockholders invested $10,000 cash in the business in exchange for common stock.
2. Purchased equipment for $5,000 cash.
3. Paid $400 cash for May office rent.
4. Paid $300 cash for supplies.
5. Incurred $250 of advertising costs in the Beacon News on account.
6. Received $4,700 in cash from customers for repair service.
7. Declared and paid a $700 cash dividend.
8. Paid part-time employee salaries $1,000.
9. Paid utility bills $140.
10. Performed repair services worth $1,100 on account.
11. Collected cash of $120 for services billed in transaction (10).
P 1-1B
On August 31, the balance sheet of La Brava Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable $3,600, Common Stock $13,000,
and Retained Earnings $700. During September, the following transactions occurred.
Assets = Liabilities + Stockholders' Equity
Trans- Accounts Notes Accounts Common Retained
Cash + + Supplies + Equipment = + + + + Rev. - Exp. - Div.
action Receivable Payable Payable Stock Earnings
Bal. +9,000 +1,700 +600 +6,000 +3,600 +13,000 +700
(1) -2,900 -2,900
(2) +1,300 -1,300
(3) -800 +2,100 +1,300
(4) +2,500 +4,800 +7,300
(5) -400 -400
(6) -2800 -2800
(7) +170 -170
(8) +10,000 +10,000
+15,900 +5,200 +600 +8,100 +10,000 +2,170 +13,000 +700 +7,300 -2,970 -400
29,800 29,800
* Notes:
1. Paid $2,900 cash for accounts payable due.
2. Collected $1,300 of accounts receivable.
3. Purchased additional equipment for $2,100, paying $800 in cash and the balance on account.
4. Recognized revenue of $7,300, of which $2,500 is collected in cash and the balance is due in October.
5. Declared and paid a $400 cash dividend.
6. Paid salaries $1,700, rent for September $900, and advertising expense $200.
7. Incurred utilities expense for month on account $170.
8. Received $10,000 from Capital Bank on a 6-month note payable.
 La Brava Veterinary Clinic La Brava Veterinary Clinic
Income Statement Retained Earnings
September September
Revenue Service Revenue 7,300 Retained Earnings On August 31 700
Add: Net income 4,330
Expense
Salaries Expense 1,700 Less: Dividend 400
Rent Expense 900 4,630
Advertising expense 200
Utilities expense 170
Total Expense 2,970
Net income 4,330

La Brava Veterinary Clinic

Balance sheet
30-Sep
Total assets
Cash 15,900
Accounts Receivable 5,200
Supplies 600
Equipment 8,100
L + SE 29,800
Liabilities
Notes Payable 10,000
Accounts Payable 2,170
Stockholders' Equity
Common Stock 13,000
Retained Earnings 700
Revenue 7,300
Expense -2,970
Dividend -400
Total Liabilities and Stockholders' Equity 29,800
 Park Flying School Ltd
Income Statement
May
Revenue Service Revenue 6,800
Expense
Advertising Expense 500
Rent Expense 1,000
Maintenance and Repairs Expense 400
Gasoline Expense 2,500
Utilities expense 400
Total Expense 4,800
Net income 2,000

Park Flying School Ltd

Retained Earnings
May
Retained Earnings, May 1 0
Add: Net income 2,000

Less: Dividend 480

1,520

Park Flying School Ltd

Balance Sheet
31-May
Total assets
Cash 4,500
Accounts Receivable 7,420
Equipment 64,000
L + SE 75,920
Liabilities
Notes Payable 28,000
Accounts Payable 1,400
Stockholders' Equity
Share capital-ordinary 45,000
Retained Earnings 1,520
Total Liabilities and Stockholders' Equity 75,920
 Park Flying School Ltd
Income Statement
May
Revenue Service Revenue 7,700
Expense
Advertising Expense 500
Rent Expense 1,000
Maintenance and Repairs Expense 400
Gasoline Expense 4,000
Utilities expense 400
Total Expense 6,300
Net income 1,400

Park Flying School Ltd

Retained Earnings
May
Retained Earnings, May 1 0
Add: Net income 1,400

Less: Dividend 480

920
 Assets = Liabilities +
Accounts Notes Accounts
Date Cash + + Supplies + Equipment = + +
Receivable Payable Payable
June 1 +10,000
2 -2,000 +14,000 +12,000
3 -500
5 +4,800
9 -300
12 +150 +150
15 +1,250 -1,250
17 +100
20 +1,500
23 -500 -500
26 -250
29 -100 -100
30 -1,000
+8,100 +3,550 +150 +14,000 +11,500 +150
25,800 25,800

Income Statement
June
Revenue 6,300
Expense -1,850
Net income 4,450

Stiner Deliveries Ltd

Balance Sheet
30-Jun
Total assets
Cash 8,100
Accounts Receivable 3,550
Supplier 150
Equipment 14,000
25,800
L + SE
Liabilities
Notes Payable 11,500
Accounts Payable 150
Stockholders' Equity
Share Capital 10,000
Retained Earnings 4,150
Total Liabilities and Stockholders' Equity 25,800
 Stockholders' Equity
Share
+ Rev. - Exp. - Div.
Capital
+10,000

-500
+4,800
-300

-100
+1,500

-250

-1,000
+10,000 +6,300 -1,850 -300
25,800
 Crosby Stills Nash Young Stills
a 250000 d 600000 g 1200000 j 500000 Retained Ea
b 950000 e 620000 h 700000 k 2200000 May
c 50000 f 380000 i 4310000 l 4650000 Retained Earnings, May 1
Add:

Less:

The sequence of preparing financial statements is income statement, owner’s equity statement, and balance sheet. The interrelatio
equity statement to the other financial from the fact that net income from the income statement is reported statements results in th
statement and ending capital reported in the owner’s equity statement is the amount reported for owner’s equity on the balance s
 Stills
Retained Earnings
May
Retained Earnings, May 1 200,000
Net income #REF!

Dividend 480
#REF!

nd balance sheet. The interrelationship of the owner’s

reported statements results in the owner’s equity
owner’s equity on the balance sheet.
 Assets = Liabilities + Stockholders' Equity
Accounts Retained Earnings
Trans- Accounts Share
Cash + Receivabl + Supplies + Equipment = + +
action Payable Capital Rev. -
e
(1) +120,000 +120,000
(2) -400
(3) -5,500 +5,500
(4) +300
(5) -600 +600
(6) +2,000 +6,500 +8,500
(7) -200
(8) -200 -200
(9) -2,200
(10) +5,700 -5,700
+118,600 +800 +600 +5,500 +100 +120,000 +8,500
125,500 125,500

Net Income +5,600

Stockholders' Equity
Retained Earnings
Exp. - Div.

-400 Rent Expense

-300 Advertising Expense

Service Revenue
-200 Dividends

-2,200 Salary Expense

-2,900 -200
125,500
 Assets = Liabilities + Stockholder
Trans- Accounts Equipmen Notes Accounts Share
Cash + + Supplies + = + + +
action Receivable t Payable Payable Capital
Bal. 4,000 1,500 500 5,000 4,200 6,000
(1) +1,400 -1,400
(2) -2,700 -2,700
(3) +3,000 +4,900
(4) -400 +1,000 +600
(5) -4,250
(6) -450
(7) +2,000 +2,000
(8) +210
+2,600 +5,000 +500 +6,000 +2,210 +2,100 +6,000
14,100 14,100

Travel Agency Travel Agency

Income Statement Retained Earnings
August August
Revenue 7,900 Retained Earnings On August 31
Add: Net income
Expense -4,460
Less: Dividend
Net income 3,440

Travel Agency
Balance sheet
31-Aug
Total assets
Cash 2,600
Accounts Receivable 5,000
Supplies 500
Equipment 6,000
L + SE 14,100
Liabilities
Notes Payable 2,210
Accounts Payable 2,100
Stockholders' Equity
Share Capital 6,000
Retained Earnings 3,790
Total Liabilities and Stockholders' Equity 14,100
 Stockholders' Equity
Retained
+ Rev. - Exp. - Div.
Earnings
800

+7,900

-4,250
-450

-210
+800 +7,900 -4,460 -450
14,100

Travel Agency
Retained Earnings
August
ngs On August 31 800
3,440

-450
3,790
 Angetic Cosmetics Co. Ltd.
Income Statement
June
Revenue Service Revenue 5,500
Expense
Advertising Expense 500
Rent Expense 1,800
Gasoline Expense 600
Utilities expense 400
Total Expense 3,300
Net income 2,200

Angetic Cosmetics Co. Ltd.

Retained Earnings
June
Retained Earnings, June 1 0
Add: Net income 2,200

Less: Dividend 900

1,300

Angetic Cosmetics Co. Ltd.

Balance Sheet
30-Jun
Total assets
Cash 10,000
Accounts Receivable 4,000
Supplies 2,000
Equipment 25,000
L + SE 41,000
Liabilities
Notes Payable 13,000
Accounts Payable 1,700
Stockholders' Equity
Share capital-ordinar 25,000
Retained Earnings 1,300
Total Liabilities and Stockholders' Equity 41,000
 Angetic Cosmetics Co. Ltd.
Income Statement
June
Revenue Service Revenue 6,300
Expense
Advertising Expense 500
Rent Expense 1,800
Gasoline Expense 700
Utilities expense 400
Total Expense 3,400
Net income 2,900

Angetic Cosmetics Co. Ltd.

Retained Earnings
June
Retained Earnings, June 1 0
Add: Net income 2,900

Less: Dividend 900

2,000
 Assets = Liabilities +

Accounts Notes Accounts

Date Cash + + Supplies + Equipment = + +
Receivable Payable Payable

May 1 +8,000
2 -800
3 +500 +500
5 -50
9 +3,000
12 -700
15 +3,300
17 -2,100
20 -500 -500
23 +2,000 -2,000
26 +5,000 +5,000
29 +2,300 +2,300
30 -150
+13,700 +1,300 +500 +2,300 +5,000 +2,300
17,800 17,800

Income Statement
June
Revenue 6,300
Expense -3,100
Net income 3,200

Stiner Deliveries Ltd

Balance Sheet
30-Jun
Total assets
Cash 13,700
Accounts Receivable 1,300
Supplier 500
Equipment 2,300
17,800
L + SE
Liabilities
Notes Payable 5,000
Accounts Payable 2,300
Stockholders' Equity
Share Capital 8,000
Retained Earnings 2,500
Total Liabilities and Stockholders' Equity 17,800
 Stockholders' Equity

Share
+ Rev. - Exp. - Div.
Capital

+8,000
-800 Rent Expense

-50 Advertising Expense

+3,000 Service Revenue
-700 Dividend
+3,300 Service Revenue
-2,100 Salary Expense

-150 Utilities Expense

+8,000 +6,300 -3,100 -700
17,800