Balance SheetJay Pembroke started a business. During the first month (April 20--), the following transactions occurred.Invested cash in business, $20,000.Bought office supplies for $4,800: $2,000 in cash and $2,800 on account.Paid one-year insurance premium, $1,100.Earned revenues totaling $3,100: $1,200 in cash and $1,900 on account.Paid cash on account to the company that supplied the office supplies in transaction (b), $2,550.Paid office rent for the month, $600.Withdrew cash for personal use, $150.The effect of each transaction is shown in the individual accounts of the expanded accounting equation.Assets=Liabilities+Owner's Equity (Items Owned) (Amts. Owed) (Owner's Investment) (Earnings) Cash+Accounts Receivable+Office Supplies+Prepaid Insurance=Accounts Payable+J. Pembroke, Capital-J. Pembroke, Drawing+Revenues-Expenses Descriptiona.20,000 20,000 b.(2,000) 4,800 2,800 c.(1,100) 1,100 d.1,200 1,900 3,100 Service feese.(2,550) (2,550) f.(600) 600 Rent expenseg.(150) 150 Bal.14,800+1,900 +4,800 +1,100 =250 +20,000 -150 +3,100-600 The income statement and statement of owner's equity for Jay Pembroke for the month ended April 30, 20-- are shown. Jay PembrokeIncome StatementFor Month Ended April 30, 20--Revenues: Service fees$3,100Expenses: Rent expense600Net income$2,500Jay PembrokeStatement of Owner’s EquityFor Month Ended April 30, 20--Jay Pembroke, capital, April 1, 20-- $ -Investment during April 20,000Total investment $20,000Net income for April$2,500 Less withdrawals for April150 Increase in capital 2,350Jay Pembroke, capital, April 30, 20-- $22,350 Required:Use the information to prepare a balance sheet for Jay Pembroke as of April 30, 20--.Jay PembrokeBalance SheetApril 30, 20--Assets Liabilities $fill in the blank 2 $fill in the blank 4 fill in the blank 6 fill in the blank 8Owner's Equity fill in the blank 10 fill in the blank 12Total assets$fill in the blank 13Total liabilities & owner's equity$fill in the blank 14

Name: Balance SheetJay Pembroke started a business. During the first month (
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Description: Balance SheetJay Pembroke started a business. During the first month (April 20--), the following transactions occurred.Invested cash in business, $20,000.Bought office supplies for $4,800: $2,000 in cash and $2,800 on account.Paid one-year insurance

The balance sheet represents the financial position of the business with assets and liabilities on a…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Balance Sheet

Jay Pembroke started a business. During the first month (April 20--), the following transactions occurred.

Invested cash in business, $20,000.
Bought office supplies for $4,800: $2,000 in cash and $2,800 on account.
Paid one-year insurance premium, $1,100.
Earned revenues totaling $3,100: $1,200 in cash and $1,900 on account.
Paid cash on account to the company that supplied the office supplies in transaction (b), $2,550.
Paid office rent for the month, $600.
Withdrew cash for personal use, $150.

The effect of each transaction is shown in the individual accounts of the expanded accounting equation.

Assets	=	Liabilities	+	Owner's Equity
(Items Owned)		(Amts. Owed)		(Owner's Investment)		(Earnings)
	Cash	+	Accounts Receivable	+	Office Supplies	+	Prepaid Insurance	=	Accounts Payable	+	J. Pembroke, Capital	-	J. Pembroke, Drawing	+	Revenues	-	Expenses	Description
a.	20,000										20,000
b.	(2,000)				4,800				2,800
c.	(1,100)						1,100
d.	1,200		1,900												3,100			Service fees
e.	(2,550)								(2,550)
f.	(600)																600	Rent expense
g.	(150)												150
Bal.	14,800	+	1,900	+	4,800	+	1,100	=	250	+	20,000	-	150	+	3,100	-	600

The income statement and statement of owner's equity for Jay Pembroke for the month ended April 30, 20-- are shown.

Jay Pembroke Income Statement For Month Ended April 30, 20--
Revenues:
Service fees	$3,100
Expenses:
Rent expense	600
Net income	$2,500

Jay Pembroke Statement of Owner’s Equity For Month Ended April 30, 20--
Jay Pembroke, capital, April 1, 20--		$ -
Investment during April		20,000
Total investment		$20,000
Net income for April	$2,500
Less withdrawals for April	150
Increase in capital		2,350
Jay Pembroke, capital, April 30, 20--		$22,350

Required:

Use the information to prepare a balance sheet for Jay Pembroke as of April 30, 20--.

Jay Pembroke Balance Sheet April 30, 20--
Assets		Liabilities
	$fill in the blank 2		$fill in the blank 4
	fill in the blank 6
	fill in the blank 8	Owner's Equity
	fill in the blank 10		fill in the blank 12
Total assets	$fill in the blank 13	Total liabilities & owner's equity	$fill in the blank 14

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