Lisa Vozniak started her own business, We Do Windows. She offers interior and exterior window cleaning for local area residents. Lisa rents a garage to store her tools and cleaning supplies and has a part-time assistant to answer the phone and handle third-story work. (Lisa is afraid of heights.) The transactions for the month of July are as follows: (a) Lisa invested cash by making a deposit in a bank account for the business, $8,000. (b) Paid rent for July, $150. (c) Purchased a used van for cash, $5,000. (d) Purchased tools on account from Clean Tools, $600. (e) Purchased cleaning supplies that cost $300. Paid $200 cash and will pay the balance next month, $100. (f) Paid part-time assistant (wages) for first half of month, $100. (g) Paid for advertising, $75. (h) Paid two-year premium for liability insurance on van, $480. (i) Received cash from clients for services performed, $800. (j) Performed cleaning services for clients on account, $500. (k) Paid phone bill, $40. (l) Received cash from clients for window cleaning performed on account in transaction (j), $200. (m) Paid part-time assistant (wages) for last half of month, $150. (n) Made partial payment on tools purchased in transaction (d), $200. (o) Earned additional revenues amounting to $800: $600 in cash and $200 on account. (p) Vozniak withdrew cash at the end of the month for personal expenses, $100.   Required: 1. Enter the above transactions in an accounting equation similar to the one illustrated below.     Assets = Liabilities + Owner’s Equity     (Items Owned)   (Amounts Owed)   (Owner’s Investment) + (Earnings)     Cash  + Accounts Receivable + Supplies + Prepaid Insurance + Tools + Van = Accounts Payable + Lisa Vozniak, Capital - Lisa Vozniak, Drawing + Revenues - Expenses Description   2. After transaction (p), compute the balance of each account. 3. Prepare an income statement for We Do Windows for the month of July 20--

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Lisa Vozniak started her own business, We Do Windows. She offers interior and exterior window cleaning for local area residents. Lisa rents a garage to store her tools and cleaning supplies and has a part-time assistant to answer the phone and handle third-story work. (Lisa is afraid of heights.) The transactions for the month of July are as follows:
(a) Lisa invested cash by making a deposit in a bank account for the business, $8,000.
(b) Paid rent for July, $150.
(c) Purchased a used van for cash, $5,000.
(d) Purchased tools on account from Clean Tools, $600.
(e) Purchased cleaning supplies that cost $300. Paid $200 cash and will pay the balance next month, $100.
(f) Paid part-time assistant (wages) for first half of month, $100.
(g) Paid for advertising, $75.
(h) Paid two-year premium for liability insurance on van, $480.
(i) Received cash from clients for services performed, $800.
(j) Performed cleaning services for clients on account, $500.
(k) Paid phone bill, $40.
(l) Received cash from clients for window cleaning performed on account in transaction (j), $200.
(m) Paid part-time assistant (wages) for last half of month, $150.
(n) Made partial payment on tools purchased in transaction (d), $200.
(o) Earned additional revenues amounting to $800: $600 in cash and $200 on account.
(p) Vozniak withdrew cash at the end of the month for personal expenses, $100.
 
Required:
1. Enter the above transactions in an accounting equation similar to the one illustrated below.
 
  Assets = Liabilities + Owner’s Equity  
  (Items Owned)   (Amounts Owed)   (Owner’s Investment) + (Earnings)  
  Cash  + Accounts Receivable + Supplies + Prepaid Insurance + Tools + Van = Accounts Payable + Lisa Vozniak, Capital - Lisa Vozniak, Drawing + Revenues - Expenses Description
 
2. After transaction (p), compute the balance of each account.
3. Prepare an income statement for We Do Windows for the month of July 20--.
4. Prepare a statement of owner’s equity for We Do Windows for the month of July 20--.
5. Prepare a balance sheet for We Do Windows as of July 31, 20--.
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