Accounting activities

Step 1 Transaction Analysis

2 Journalizing (Debit and Creit)
3 Posting
4 Preparation of Trial Balance
5 Adjustment
6 Preparation of financial Statement
-Statement of Operation (Income Statement)
- Statement of Financial Position (Balance Sheet)

Rule
DEBIT CREDIT

Increase ASSETS Decrease ASSETS

Decrease LIABILITIES Increase LIABILITIES
Decrease OWNER'S EQUITY Increase OWNER'S EQUITY
Decrease Revenue Increase Revenue
Increase Expenses Decrease Expenses
2# Journalizing
2001 Decription P/R Debit Credit
April a Cash GL-1 60,000.00
Obispo, Capital 60,000.00
To record the initial investment of the owner

b Service Vehicle 112,500.00

Accounts Payable 90,000.00
Cash 22,500.00
To record the purchase of SV to LM with AP to be
paid in 30 days

c Spray Equipment 18,000.00

Accounts Payable 18,000.00

d Rent Expense 5,600.00

Cash 5,600.00

e Prepaid Insurance 5,760.00

Cash 5,760.00

f Cash 21,750.00
Service Revenue 21,750.00

g Supplies 5,730.00
Cash 5,730.00

h Accounts Receivable 4,440.00

Service Revenue 4,440.00

i Utilities Expense 960.00

Cash 960.00

j Gasoline Expense 3,270.00

Accounts payable 3,270.00

k Cash 16,420.00
Service Revenue 16,420.00

l Obispo, Withdrawal 10,500.00

Cash 10,500.00

m Salaries Expense 20,400.00

Cash 20,400.00
 3# Posting ALCIE

Cash Accounts Receivable

DR CR DR CR
a. 60,000.00 22,500.00 b. h. 4,440.00 g.
f. 21,750.00 5,600.00 d.
k. 16,420.00 5,760.00 e.
5,730.00 g.
960.00 i
10,500.00 l.
20,400.00 m

98,170.00 71,450.00 Spray Equipment

26,720.00 DR CR
c. 18,000.00 b.

Accounts Payable Obispo, Capital

DR CR DR CR
90,000.00 b. 60,000.00 a. l.
18,000.00 c.
3,270.00 j.
111,270.00

Salaries Expense Rent Expense

DR CR DR CR
m. 20,400.00 d. 5,600.00 j.
 4# TRIAL BALANCE

Supplies Prepaid Insurance

DR CR DR CR
5,730.00 e. 5,760.00

Service Vehicle
DR CR
112,500.00

Obispo, Withdrawals Service Revenues

DR CR DR CR
10,500.00 21,750.00 f.
4,440.00
16,420.00 k.
42,610.00

Gasoline Expense Utilities Expense

DR CR DR CR
3,270.00 i. 960.00
4# TRIAL BALANCE 5# Adjustment 6# Prpepation of Financial Stat

Obispo Spray Service Obisp

TRIAL BALANCE STATEME
April 30, 2001 For the mont

Account Titles Debit Credit Revenues

Cash 26,720.00
Accounts Receivable 4,440.00
Supplies 5,730.00 Less: Operating Expenses
Prepaid Insurance 5,760.00
Spray Equipment 18,000.00
Service Vehicle 112,500.00
Accounts Payable 111,270.00
Obispo, Capital 60,000.00
Obispo, Withdrawals 10,500.00
Service Revenues 42,610.00 NET INCOME
Salaries Expense 20,400.00
Rent Expense 5,600.00
Gasoline Expense 3,270.00
Utilities Expense 960.00
TOTAL 213,880.00 213,880.00

-
6# Prpepation of Financial Statement

Obispo Spray Service Obispo

STATEMENT OF OPERATION STATEMENT OF
For the month Ended April 30, 2001 As of A

Revenues
Service Revenue 42,610.00 Current Assets

Less: Operating Expenses

Salaries Expense 20,400.00
Rent Expense 5,600.00
Gasoline Expense 3,270.00
Utilities Expense 960.00
Total Operating Expenses 30,230.00 Non-Current Assets

NET INCOME 12,380.00

TOTAL ASSETS

Liabilties

Owner's Equity

TOTAL LIABILTIES AND OWNER

 Obispo Spray Service
STATEMENT OF FINANCIAL POSITION
As of April 30, 2001

ASSETS
Current Assets
Cash 26,720.00
Accounts Receivable 4,440.00
Supplies 5,730.00
Prepaid Insurance 5,760.00
Total Current Assets 42,650.00

Non-Current Assets
Spray Equipment 18,000.00
Service Vehicle 112,500.00
Total Non-Current Assets 130,500.00

TOTAL ASSETS 173,150.00

LIABILTIES AND OWNER'S EQUITY

Liabilties
Accounts Payable 111,270.00
Total Liabilities 111,270.00

Owner's Equity
Obispo, Capital 60,000.00
Less: Obispo Withdrawals 10,500.00
Net Capital 49,500.00
Add: Net Income 12,380.00
Total Owner's Equity 61,880.00

TOTAL LIABILTIES AND OWNER'S EQUITY 173,150.00