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--
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--
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 |
Assets | = | Liabilities | + | Owner’s Equity | ||||||||||||||||||
(Items Owned) | (Amounts Owed) | (Owner’s Investment) | + | (Earnings) | ||||||||||||||||||
Cash | + | + | 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 |
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