Case Chapter 1

a.
Assets Liability Equity
Transaction Cash Equipment AR AP Note Payable Share Capital Expense Revenue
1 $ 10.000 $ 10.000
2 $ -800 $ 800
3 $ 3.000 $ 3.000
4 $ 1.500 $ 1.500
5 $ 700 $ 700 + - +
=
6 $ 2.000 $ 2.000
7 $ -900 $ 500
$ 300
$ 100
$ 10.500 $ 3.000 $ 2.000 $ 3.000 $ 700 $ 10.000 $ 1.700 $ 3.500
$ 15.500 $ 3.700 $ 11.800
$ 15.500 $ 15.500

Total liabilities and eq

b.
Income Statements Retained Earning Statement

Revenue Retained earning, May 1 $ -

Service revenue $ 3.500 Add: Net income $ 1.800
Expenses
Rent expenses $ 800 $ 1.800
Salary expenses $ 500
Utilities expense $ 300 Less: Dividends $ -
Telephone expense $ 100 Retained earnings, May 31 $ 1.800
Total expenses $ 1.800

Net income $ 1.800

Balance Sheet

Assets
Cash $ 10.500
Equipment $ 3.000
Account Receivable $ 2.000
Total Assets $ 15.500

Liabilities and Equity

Liability
Account payable $ 3.000
Note payable $ 700

Equity
Share Capital $ 10.000
Retained earning $ 1.800

Total liabilities and equity $ 15.500