No Asset =

Cash accounts receivables Suppliers equipment

1 +15000$
2 -$600.00
3 -3000$ +3000$
4
5 -900$ +900$
6 +3000$ +7000$
7 -600$
8 -500$
9 -2500$
10 +4000$ -4000$
$20,800.00

Revenue
Service
revenue 10000$
Expenses
Salaries 2500$
Advertising 700$
Office rent 600$
Total expense 3800$
Net income 6200$
 Liabilities + Owner's equity
Owners's
Accounts payables owner's drawing Revenue Expenses
capital
15000$
-$600.00

+700$ -700$

+10000$
-600$
-500$
-2500$

$20,800.00
 No Asset = Liabilities
accounts Note
Cash Suppliers equipment
receivables payables
0 5000$ 1500$ 500$ 6000$
1 +1200$ -1200$
2 -2800$
3 +3000$ +4500$
4 -400$ +2000$
5 -3800$
6 -700$
7 +2000$ +2000$
8
$16,800.00 $

Income statement Owner's equity statement

Owner's capital,
Revenue August 1 8800$
Service
revenue 7500$ Add
Expenses Net income 3430$
Rent 900$ Less Drawings 700$
Owner's capital,
Advertise 400$ August 30 $11,530.00
Salaries 2500$
Utilities 270$
Net income 3430$
 Liabilities + Owner's equity
Accounts owner's
Owners's capital Revenue Expenses
payables drawing
4200$ 8800$

-2800$
+7500$
+1600$
-3800$
-700$

+270$ -270$
$ 16,800.00

Balance sheet

Assets Cash 3500$

Accounts
receivables 4800$
Suppliers 500$
Equipments 8000$
Liabilities + Note payables 2000$
owner's equity
Account payables 3270$
Owner's capital 11530$
 No Asset = Liabilities
accounts
Cash Suppliers equipment Note payables
receivables
0 +12000$
1 10150$ 2800$ 2000$ 10000$ 9000$
2

Income statement Owner's equity statement

Owner's capital,
Revenue
August 1

Service revenue 6500$

Add Investment 12000$
Expenses Net income 4050$
Rent 1600$ Less Drawings 1300$

Owner's capital,
Advertise 500$
August 30
$ 14,750.00
Gasoline 200$

Utilities 150$

Net income 4050$

Income statement Owner's equity statement

Owner's capital,
Revenue
August 1
Service revenue 6500$+900$ Add Investment 12000$
Expenses Net income 4800$
Rent 1600$ Less Drawings 1300$
Owner's capital,
Advertise 500$ $ 15,500.00
August 30
Gasoline 200$+150$

Utilities 150$

Net income 4800$

Liabilities + Owner's equity
Accounts Owners's
owner's drawing Revenue Expenses
payables capital
12000$
1200$ 1300$ 6500$ 2450$

Balance sheet

Assets Cash 10150$

Accounts 2800$
receivables
Suppliers 2000$
Equipments 10000$

Liabilities +
owner's Note payables 9000$
equity
Account
payables 1200$

Owner's
14750$
capital
 Date Asset = Liabilities
accounts Note
Cash Suppliers equipment
receivables payables
1 +7000$
2 -900$
3 +600$
5 -125$
9 +4000$
12 -1000$
15 +5400$
17 -2500$
20 -600$
23 +4000$ -4000$
26 +5000$ +5000$
29 +4200$
30 -275$

Income statement Balance sheet

Revenue Assets Cash 14600$

Service Accounts
9400$ 1400$
revenue receivables

Expenses Suppliers 600$

Rent 900$ Equipments 4200$

Liabilities +
Advertise 125$ Note payables 5000$
owner's equity
Account
Salaries 2500$ payables 4200$

Utilities 275$ Owner's capital 11600$

Net income 5600$

Liabilities + Owner's equity
Accounts Owners's owner's
Revenue Expenses
payables capital drawing
+7000$
-900$
+600$
-125$
+4000$
-1000$
+5400$
-2500$
-600$

+4200$
-275$
 Alpla Company Beta company Psi company Omega Company
1-Jan-17
Assets 80000$ 90000$ (g)129000$ 150000$
Liabilities 41000$ (d) 50000$ 80000$ (j) 60000$

Owner's equity (a)39000$ 40000$ 49000$ 90000$

31-Dec-17
Assets (b) 110000$ 112000$ 170000$ (k) 251000$
Liabilities 60000$ 72000$ (h) 88000$ 100000$
Owner's equity 50000$ (e) 40000$ 82000$ 151000$
Owner's equity changes in
year
Additional invesment ( c ) 9000$ 8000$ 10000$ 15000$
Drawings 15000$ (f) 33000$ 12000$ 10000$
Total revenues 350000$ 410000$ (i) 385000$ 500000$
Total expense 333000$ 385000$ 350000$ (l) 444000$

Owner's equity statement of Alpha company

Owner's capital, January 1

39000$
Add Investment 9000$

Net income 17000$

Less Drawings 15000$

Owner's capital, August 30

50000$

The sequence of preparing financial statements is income statement, owner’s

equity statement, and balance sheet. The interrelationship of the owner’s equity
statement to the other financial statements results from the fact that net income
from the income statement is reported in the owner’s equity statement and
ending capital reported in the owner’s equity statement is the amount
reported for owner’s equity on the balance sheet.