FUNDAMENTAL ACCOUNTING PRINCIPLES
24th Edition
ISBN: 9781260811704
Author: Wild
Publisher: MCG
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Question
Chapter 1, Problem 9BPSB
To determine
2. To Prepare:
The income statement, statement of owner's equity and the
Expert Solution
Explanation of Solution
The income statement for Rivera Roofing Co for July month is as below:
| Rivera Roofing Co | |||
| Income Statement for the month July | |||
| Details | Amount in S | ||
| Revenue | |||
| Income from services | $20,800 | ||
| Expenses | |||
| Rent expenses | 700 | ||
| Salary expenses | 1,560 | ||
| Utilities expenses | 295 | 2,555 | |
| Net income | $18,245 | ||
The statement of owner's equity for Rivera Roofing Co is as below:
| Rivera Roofing Co | ||
| Statement of owner's equity for the month of July | ||
| Details | Amount in S | |
| Opening equity | 0 | |
| Add: Equity introduced in form of cash | 80,000 | |
| Add: Net income for the year | 18,245 | |
| Less: Cash withdrawals | -1,800 | |
| Closing equity as on July 31 | $96,445 | |
The balance sheet as of July 31 is as below;
| Rivera Roofing Company | ||
| Balance Sheet as on July 31 | ||
| Details | Amount in S | |
| Liabilities | ||
| Equity | $96,445 | |
| Account payable | $7,100 | |
| Total | $103,545 | |
| Assets | ||
| Cash | $87,545 | |
| | $5,000 | |
| Office Equipments | $2,300 | |
| Office Supplies | $3,700 | |
| Total | $103,545 | |
To determine
3. To Prepare:
A statement of
Expert Solution
Explanation of Solution
The statement of cash flows for the month of July is prepared as below.
| Rivera Roofing Company | |||
| Statement of Cash flow for the month of July | |||
| Amount in S | |||
| Opening cash balance | 0 | ||
| Cash flow from operating activities | |||
| Rent paid in cash | -700 | ||
| Revenue received in cash | 7,600 | ||
| Cash received from customer | 8,200 | ||
| Salary paid in cash | -1,560 | ||
| Utilities expenses paid in cash | -295 | 13,245 | |
| Cash flow from financing activities | |||
| Cash paid to supplier of equipment | -1,000 | ||
| Cash paid to supplier of office supplies | -600 | ||
| Cash paid to supplier of equipment | -2,300 | -3,900 | |
| Cash flow from investing activities | |||
| Cash received from Owner | 80,000 | ||
| Cash withdrawals by owner | -1,800 | 78,200 | |
| Cash Balance as on July 31 | 87,545 | ||
To determine
4. To Compute:
The dollar effect of the given assumption on the month end amount for
a) Total assets
b) Total liabilities
c) Total equity.
Expert Solution
Explanation of Solution
The dollar effect of given assumption on month end is as below
a) Total assets: Total asset increased by $1,000.
b) Total liabilities: Total liabilities decreased by $4,000.
c) Total equity: Total equity increased by $1,000
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Chapter 1 Solutions
FUNDAMENTAL ACCOUNTING PRINCIPLES
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