P1-42A Preparing financial statements n Presented here are the accounts of Gate City Answering Service for the year ended December 31, 2014. Land $ 8,000 Owner contribution, 2014 $ 28,000 Notes Payable 32,000 Accounts Payable 11,000 2,600 Accounts Receivable 1,000 Property Tax Expense Wayne, Withdrawals 30,000 Advertising Expense 15,000 Rent Expense 13,000 Building 145,200 Salaries Expense 65,000 Cash 3,000 Salaries Payable 1,300 Equipment 16,000 192,000 Insurance Expense 2,500 Service Revenue 10,000 Interest Expense 7,000 Office Supplies 54,000 Wayne, Capital, 12/31/13 Requirements 1. Prepare Gate City Answering Service's income statement. 2. Prepare the statement of owner's equity. 3. Prepare the balance sheet.
P1-42A Preparing financial statements n Presented here are the accounts of Gate City Answering Service for the year ended December 31, 2014. Land $ 8,000 Owner contribution, 2014 $ 28,000 Notes Payable 32,000 Accounts Payable 11,000 2,600 Accounts Receivable 1,000 Property Tax Expense Wayne, Withdrawals 30,000 Advertising Expense 15,000 Rent Expense 13,000 Building 145,200 Salaries Expense 65,000 Cash 3,000 Salaries Payable 1,300 Equipment 16,000 192,000 Insurance Expense 2,500 Service Revenue 10,000 Interest Expense 7,000 Office Supplies 54,000 Wayne, Capital, 12/31/13 Requirements 1. Prepare Gate City Answering Service's income statement. 2. Prepare the statement of owner's equity. 3. Prepare the balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:P1-42A Preparing financial statements r
Presented here are the accounts of Gate City Answering Service for the year ended
December 31, 2014.
$ 8,000
Owner contribution, 2014
$ 28,000
Land
Notes Payable
32,000
Accounts Payable
11,000
Property Tax Expense
2,600
Accounts Receivable
1,000
Wayne, Withdrawals
30,000
Advertising Expense
15,000
Rent Expense
13,000
Building
145,200
Salaries Expense
65,000
Cash
3,000
Salaries Payable
1,300
Equipment
16,000
192,000
Insurance Expense
2,500
Service Revenue
Office Supplies
10,000
Interest Expense
7,000
54,000
Wayne, Capital, 12/31/13
Requirements
1. Prepare Gate City Answering Service's income statement.
2. Prepare the statement of owner's equity.
3. Prepare the balance sheet.

Transcribed Image Text:P1-46A Using the accounting equation for transaction analysis and preparing
financial statements
Angela Peters recently opened her own law office, which she operates as a sole
proprietorship. The name of the new entity is Angela Peters, Attorney. Peters
experienced the following events during the organizing phase of the new business
and its first month of operation, March 2014. Some of the events were personal
and did not affect the law practice. Others were business transactions and should be
accounted for by the business.
Sold personal investment in eBay stock, which she had owned for
several years, receiving $31,000 cash.
Mar. 1
Deposited the $31,000 cash from the sale of the eBay stock in her
personal bank account.
Deposited $89,000 cash in a new business bank account titled
Angela Peters, Attorney. The business gave capital to Peters.
3.
Paid $400 cash for ink cartridges for the printer.
Purchased computer for the law office, agreeing to pay the account,
$9,300, within three months.
9.
Received $2,000 cash from customers for services rendered.
15
Received bill from The Lawyer for magazine subscription, $120.
Finished court hearings on behalf of a client and submitted a bill for
legal services, $13,500, on account.
23
28
Paid bill from The Lawyer.
30
Paid utilities, $1,200.
31
Received $3,000 cash from clients billed on Mar 23.
31
Peters withdrew cash of $2,000.
Requirements
1. Analyze the effects of the preceding events on the accounting equation of the sole
proprietorship of Angela Peters, Attorney. Use a format similar to Exhibit 1-4.
2. Prepare the following financial statements:
a. Income statement
b. Statement of owner's equity
c. Balance sheet
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