Binbutti Engineering, a sole proprietorship, completed the following transactions during July 2023, the third month of operations:   July 1 Bob Binbutti, the owner, invested $300,000 cash, office equipment with a value of $12,000, and $90,000 of drafting equipment in the business. July 2 Purchased land for an office. The land was worth $108,000, which was paid with $10,800 cash and a long-term note payable for $97,200. July 3 Purchased a portable building with $150,000 cash and moved it onto the land. July 5 Paid $12,000 cash for the premiums on two one-year insurance policies. July 7 Completed and delivered a set of plans for a client and collected $1,400 cash. July 9 Purchased additional drafting equipment for $45,000. Paid $21,000 cash and signed a long-term note payable for the $24,000 balance. July 10 Completed $4,000 of engineering services for a client. This amount is to be paid within 30 days. July 12 Purchased $4,500 of additional office equipment on credit. July 15 Completed engineering services for $7,000 on credit. July 16 Received a bill for rent on equipment that was used on a completed job. The $13,800 rent must be paid within 30 days. July 17 Collected $400 from the client of July 10. July 19 Paid $12,000 wages to the drafting assistants. July 22 Paid the account payable created on July 12. July 25 Paid $1,350 cash for some repairs to an item of drafting equipment. July 26 Binbutti withdrew $800 cash from the business for personal use. July 30 Paid $12,000 wages to the drafting assistants. July 31 Paid $6,000 cash for advertising in the local newspaper during July.   Job to do. Present the table of the effect of transactions, same as exercise 1, on the accounting equation using the identified account   Consider the following balances as of June 30, 2023: Cash (101) $26,000; Accounts Receivable (106) $3,000; Prepaid Insurance (128) $500; Office Equipment (163) $1,700; Drafting Equipment (167) $1,200; Building (173) $42,000; Land (183) $28,000; Accounts Payable (201) $1,740; Long-Term Notes Payable (251) $24,000; Bob Binbutti, Capital (301) $54,000; Bob Binbutti, Withdrawals (302) $1,000; Engineering Revenue (401) $29,600; Wages Expense (623) $4,000; Equipment Rental Expense (645) $1,000; Advertising Expense (655) $640; and Repairs Expense (684) $300.   Prepare The financial statement for Binbutti Engineering in the following order:   Income Statement Statement of changes in owner’s equity

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Binbutti Engineering, a sole proprietorship, completed the following transactions during July 2023, the third month of operations:

 

July 1 Bob Binbutti, the owner, invested $300,000 cash, office equipment with a value of $12,000, and $90,000 of drafting equipment in the business.

July 2 Purchased land for an office. The land was worth $108,000, which was paid with $10,800 cash and a long-term note payable for $97,200.

July 3 Purchased a portable building with $150,000 cash and moved it onto the land.

July 5 Paid $12,000 cash for the premiums on two one-year insurance policies.

July 7 Completed and delivered a set of plans for a client and collected $1,400 cash.

July 9 Purchased additional drafting equipment for $45,000. Paid $21,000 cash and signed a long-term note payable for the $24,000 balance.

July 10 Completed $4,000 of engineering services for a client. This amount is to be paid within 30 days.

July 12 Purchased $4,500 of additional office equipment on credit.

July 15 Completed engineering services for $7,000 on credit.

July 16 Received a bill for rent on equipment that was used on a completed job. The $13,800 rent must be paid within 30 days.

July 17 Collected $400 from the client of July 10.

July 19 Paid $12,000 wages to the drafting assistants.

July 22 Paid the account payable created on July 12.

July 25 Paid $1,350 cash for some repairs to an item of drafting equipment.

July 26 Binbutti withdrew $800 cash from the business for personal use.

July 30 Paid $12,000 wages to the drafting assistants.

July 31 Paid $6,000 cash for advertising in the local newspaper during July.

 

Job to do.

  1. Present the table of the effect of transactions, same as exercise 1, on the accounting equation using the identified account

 

  1. Consider the following balances as of June 30, 2023: Cash (101) $26,000; Accounts Receivable (106) $3,000; Prepaid Insurance (128) $500; Office Equipment (163) $1,700; Drafting Equipment (167) $1,200; Building (173) $42,000; Land (183) $28,000; Accounts Payable (201) $1,740; Long-Term Notes Payable (251) $24,000; Bob Binbutti, Capital (301) $54,000; Bob Binbutti, Withdrawals (302) $1,000; Engineering Revenue (401) $29,600; Wages Expense (623) $4,000; Equipment Rental Expense (645) $1,000; Advertising Expense (655) $640; and Repairs Expense (684) $300.

 

  1. Prepare The financial statement for Binbutti Engineering in the following order:

 

  • Income Statement
  • Statement of changes in owner’s equity

Balance sheet.

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