The following transactions occurred during May: (a) Invested cash in the business, $25,000. (b) Purchased a used van for cash, $6,000. (c) Purchased equipment on account, $4,000. (d) Received cash for services rendered, $7,500. (e) Paid cash on account owed from transaction (c), $2,300. (f) Paid rent for the month, $850. (g) Paid phone bill, $230. (h) Earned revenue on account, $4,500. (i) Purchased office supplies for cash, $160. (j) Paid wages to an assistant, $800. (k) Purchased a one-year insurance policy, $1,100. (l) Received cash from services performed in transaction (h), $3,400. (m) Paid cash for gas and oil expense on the van, $155. (n) Purchased additional equipment for $4,200, paying $1,500 cash and spreading the remaining payments over the next 10 months. (o) Earned service fees for the remainder of the month of $3,500: $1,900 in cash and $1,600 on account. (p) Withdrew cash at the end of the month, $2,900. Determine the following information. Use the format provided below. 1. a. Total revenue for the month $ b. Total expenses for the month
The following transactions occurred during May: (a) Invested cash in the business, $25,000. (b) Purchased a used van for cash, $6,000. (c) Purchased equipment on account, $4,000. (d) Received cash for services rendered, $7,500. (e) Paid cash on account owed from transaction (c), $2,300. (f) Paid rent for the month, $850. (g) Paid phone bill, $230. (h) Earned revenue on account, $4,500. (i) Purchased office supplies for cash, $160. (j) Paid wages to an assistant, $800. (k) Purchased a one-year insurance policy, $1,100. (l) Received cash from services performed in transaction (h), $3,400. (m) Paid cash for gas and oil expense on the van, $155. (n) Purchased additional equipment for $4,200, paying $1,500 cash and spreading the remaining payments over the next 10 months. (o) Earned service fees for the remainder of the month of $3,500: $1,900 in cash and $1,600 on account. (p) Withdrew cash at the end of the month, $2,900. Determine the following information. Use the format provided below. 1. a. Total revenue for the month $ b. Total expenses for the month
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Net Income And Change In Owner's Equity Wilhelm Kohl Started A Business In May 20-- Called Kohl's Home Repair. Kohl Hired A Part-Time College Student As An Assistant. Kohl Has Decided To Use The Following Accounts For Recording Transactions: Assets Owner’s Equity Cash Wilhelm Kohl, Capital Accounts Receivable
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Net Income and Change in Owner's Equity
Wilhelm Kohl started a business in May 20-- called Kohl's Home Repair. Kohl hired a part-time college student as an assistant. Kohl has decided to use the following accounts for recording transactions:
Assets | Owner’s Equity |
Cash | Wilhelm Kohl, Capital |
Accounts Receivable | Wilhelm Kohl, Drawing |
Office Supplies | Revenue |
Prepaid Insurance | Service Fees |
Equipment | Expenses |
Van | Rent Expense |
Liabilities | Wages Expense |
Accounts Payable | Phone Expense |
Gas and Oil Expense |
The following transactions occurred during May:
(a) | Invested cash in the business, $25,000. | |
(b) | Purchased a used van for cash, $6,000. | |
(c) | Purchased equipment on account, $4,000. | |
(d) | Received cash for services rendered, $7,500. | |
(e) | Paid cash on account owed from transaction (c), $2,300. | |
(f) | Paid rent for the month, $850. | |
(g) | Paid phone bill, $230. | |
(h) | Earned revenue on account, $4,500. | |
(i) | Purchased office supplies for cash, $160. | |
(j) | Paid wages to an assistant, $800. | |
(k) | Purchased a one-year insurance policy, $1,100. | |
(l) | Received cash from services performed in transaction (h), $3,400. | |
(m) | Paid cash for gas and oil expense on the van, $155. | |
(n) | Purchased additional equipment for $4,200, paying $1,500 cash and spreading the remaining payments over the next 10 months. | |
(o) | Earned service fees for the remainder of the month of $3,500: $1,900 in cash and $1,600 on account. | |
(p) | Withdrew cash at the end of the month, $2,900. |
Determine the following information. Use the format provided below.
1. | a. Total revenue for the month | $ | |
b. Total expenses for the month | |||
c. Net income for the month | $ | ||
2. | a. Wilhelm Kohl's original investment in the business | $ | |
+ Net income for the month | $ | ||
- Owner's drawing | |||
Increase (decrease) in capital | |||
= Ending owner's equity | $ |
b. End-of-month |
||||
Assets | = | Liabilities | + | Owner's Equity |
$ | = | $ | + | $ |
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