Answered: Ruth Lewis opened a law office on July…

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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Question

Ruth Lewis opened a law office on July 1, 2020. On July 31, the balance sheet showed Cash $5,000, Accounts Receivable $1,700, Supplies $500, Equipment $5,700, Accounts Payable $3,600, and Owner’s Capital $9,300. During August, the following transactions occurred.

1.		Collected $1,400 of accounts receivable.
2.		Paid $2,800 cash on accounts payable.
3.		Recognized revenue of $7,700, of which $2,500 is collected in cash and the balance is due in September.
4.		Purchased additional equipment for $2,100, paying $500 in cash and the balance on account.
5.		Paid salaries $1,700, rent for August $1,100, and advertising expenses $350.
6.		Withdrew $700 in cash for personal use.
7.		Received $1,600 from Standard Federal Bank—money borrowed on a note payable.
8.		Incurred utility expenses for month on account $180.

Prepare an income statement for August.

RUTH LEWIS, ATTORNEY AT LAW Income Statement For the Year Ended August 31, 2020August 31, 2020For the Month Ended August 31, 2020
DrawingsExpensesNet Income / (Loss)Owner’s Capital, August 1Owner’s Capital, August 31RevenuesTotal ExpensesTotal RevenuesInvestments
		$
DrawingsExpensesNet Income / (Loss)Owner’s Capital, August 1Owner’s Capital, August 31RevenuesTotal ExpensesTotal RevenuesInvestments
	$



Drawings Expenses Net Income / (Loss) Owner’s Capital, August 1 Owner’s Capital, August 31 Revenues Total Expenses Total Revenues Investments
DrawingsExpensesNet Income / (Loss)Owner’s Capital, August 1Owner’s Capital, August 31RevenuesTotal ExpensesTotal RevenuesInvestments		$

SHOW LIST OF ACCOUNTS

Prepare an owner’s equity statement for August. (List items that increase owner's equity first.)

RUTH LEWIS, ATTORNEY AT LAW Owner's Equity Statement For the Year Ended August 31, 2020For the Month Ended August 31, 2020August 31, 2020
DrawingsExpensesNet Income / (Loss)Owner’s Capital, August 1Owner’s Capital, August 31RevenuesTotal ExpensesTotal RevenuesInvestments	$
AddLess : DrawingsExpensesNet Income / (Loss)Owner’s Capital, August 1Owner’s Capital, August 31RevenuesTotal ExpensesTotal RevenuesInvestments

AddLess : DrawingsExpensesNet Income / (Loss)Owner’s Capital, August 1Owner’s Capital, August 31RevenuesTotal ExpensesTotal RevenuesInvestments
DrawingsExpensesNet Income / (Loss)Owner’s Capital, August 1Owner’s Capital, August 31RevenuesTotal ExpensesTotal RevenuesInvestments	$

SHOW LIST OF ACCOUNTS

Prepare a balance sheet at August 31. (List Assets in order of liquidity.)

RUTH LEWIS, ATTORNEY AT LAW Balance Sheet For the Month Ended August 31, 2020August 31, 2020For the Year Ended August 31, 2020
Assets
					$



Current Assets Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Owner’s Equity Total Assets Total Current Assets Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Owner’s Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Owner’s Equity					$
Liabilities and Owner’s Equity
Current AssetsLiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesOwner’s EquityTotal AssetsTotal Current AssetsTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Owner’s EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Owner’s Equity
					$

Current Assets Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Owner’s Equity Total Assets Total Current Assets Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Owner’s Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Owner’s Equity
Current AssetsLiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesOwner’s EquityTotal AssetsTotal Current AssetsTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Owner’s EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Owner’s Equity

Current Assets Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Owner’s Equity Total Assets Total Current Assets Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Owner’s Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Owner’s Equity					$

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