College Accounting, Chapters 1-9
College Accounting, Chapters 1-9
22nd Edition
ISBN: 9781305667679
Author: James A. Heintz; Robert W. Parry
Publisher: Cengage South-Western
bartleby

Concept explainers

bartleby

Videos

Textbook Question
Book Icon
Chapter 3, Problem 14SPA

NET INCOME AND CHANGE IN OWNER’S EQUITY Refer to the trial balance of Kohl’s Home Repair in Problem 3-13A to determine the following information. Use the format provided below.

Chapter 3, Problem 14SPA, NET INCOME AND CHANGE IN OWNERS EQUITY Refer to the trial balance of Kohls Home Repair in Problem

1. a

Expert Solution
Check Mark
To determine

Determine the total revenue for the month of May.

Explanation of Solution

Revenue is known as “Top line” because it appears very top on the income statement of the company. It is used to imply profits or net income (bottom line) of the company by subtracting the total expenses from total revenues.

Determine the total revenue for the month of May:

Total revenue for the month of May = (Service revenue + Revenue earned on account + Service fees)($7,500 +$4,500 + $3,500)=$15,500

Conclusion

Hence, the total revenue for the month of May is $15,500.

1.b

Expert Solution
Check Mark
To determine

Determine the total expenses for the month of May.

Explanation of Solution

Expense is the cost borne by a company to produce and sell the goods and services to the customers. This involves outflow of cash by making a payment for an individual or company for a particular item and service.

Determine the total expenses for the month of May:

Total expenses for the month of May = (Rent expense + Wages expense + Phone expense +Gas and oil expense)($850 +$800 + $230+$155)=$2,035

Conclusion

Hence, the total expense for the month of May is $2,035.

1.c

Expert Solution
Check Mark
To determine

Determine the net income for the month of May.

Explanation of Solution

Net income: The bottom line of income statement which is the result of excess of earnings from operations (revenues) over the costs incurred for earning revenues (expenses) is referred to as net income.

Determine the net income for the month of May:

Net income for the month of May = (Total revenuesTotal expenses)($15,500$2,035)=$13,465

Conclusion

Hence, the net income for the month of May is $13,465.

2.a

Expert Solution
Check Mark
To determine

Determine the amount of ending owner’s equity.

Explanation of Solution

Statement of owners’ equity: This statement reports the beginning owner’s equity and all the changes, which led to ending owners’ equity. Additional capital, net income from income statement is added to and a drawing is deducted from beginning owner’s equity to arrive at the result, ending owner’s equity.

Determine the amount of ending owner’s equity:

K Home Repair
Statement of Owner’s Equity
For Month Ended May 31, 20--
ParticularsAmount ($)Amount ($)
Invested cash in the business 25,000
Add: Net income for May13,465 
Less: Withdrawals for May(2,900)
Increase in capital 10,565
Ending owner’s equity $35,565

Table (1)

2.b

Expert Solution
Check Mark
To determine

Show the accounting equation for the end of month.

Explanation of Solution

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relation between resources or assets of a company and claims of resources to creditors and owners. Accounting equation is expressed as shown below:

  Assets = Liabilities + Owners' EquityAssets = Liabilities+{(Owners' investments)+(Owners' withdrawals)+((Revenues)(Expenses))}

Show the accounting equation for the end of month:

Assets     = Liabilities + Owner's Equity$39,965  = $4,400       +$35,565

Working note:

Calculate the amount of assets:

Assets = (Cash + Accounts receivable + Office supplies + Prepaid insurance + Equipment + Van)=($21,805+$2,700+$160+$1,100+$8,200+$6,000)=$39,965

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Need help with this accounting questions
General Accounting
Financial Accounting Question answer do fast

Chapter 3 Solutions

College Accounting, Chapters 1-9

Ch. 3 - Prob. 5MCCh. 3 - Foot and balance the accounts receivable T account...Ch. 3 - LO3 Complete the following questions using either...Ch. 3 - Analyze the following transaction using the T...Ch. 3 - The following accounts have normal balances....Ch. 3 - What are the three major parts of a T account?Ch. 3 - Prob. 2RQCh. 3 - What is a footing?Ch. 3 - What is the relationship between the revenue and...Ch. 3 - What is the function of the trial balance?Ch. 3 - Prob. 1SEACh. 3 - DEBIT AND CREDIT ANALYSIS Complete the following...Ch. 3 - ANALYSIS OF T ACCOUNTS Richard Gibbs began a...Ch. 3 - NORMAL BALANCE OF ACCOUNT Indicate the normal...Ch. 3 - TRANSACTION ANALYSIS Linda Kipp started a business...Ch. 3 - TRANSACTION ANALYSIS Linda Kipp starred a business...Ch. 3 - ANALYSIS OF TRANSACTIONS Charles Chadwick opened a...Ch. 3 - ANALYSIS OF TRANSACTIONS Charles Chadwick opened a...Ch. 3 - TRIAL BALANCE The following accounts have normal...Ch. 3 - Provided below is a trial balance for Juanitas...Ch. 3 - Provided below is a trial balance for Juanitas...Ch. 3 - Provided below is a trial balance for Juanitas...Ch. 3 - T ACCOUNTS AND TRIAL BALANCE Wilhelm Kohl started...Ch. 3 - NET INCOME AND CHANGE IN OWNERS EQUITY Refer to...Ch. 3 - FINANCIAL STATEMENTS Refer to the trial balance in...Ch. 3 - FOOT AND BALANCE A T ACCOUNT Foot and balance the...Ch. 3 - DEBIT AND CREDIT ANALYSIS Complete the following...Ch. 3 - ANALYSIS OF T ACCOUNTS Roberto Alvarez began a...Ch. 3 - NORMAL BALANCE OF ACCOUNT Indicate the normal...Ch. 3 - TRANSACTION ANALYSIS George Atlas started a...Ch. 3 - TRANSACTION ANALYSIS George Atlas started a...Ch. 3 - ANALYSIS OF TRANSACTIONS Nicole Lawrence opened a...Ch. 3 - ANALYSIS OF TRANSACTIONS Nicole Lawrence opened a...Ch. 3 - TRIAL BALANCE The following accounts have normal...Ch. 3 - Provided below is a trial balance for Bills...Ch. 3 - Provided below is a trial balance for Bills...Ch. 3 - Provided below is a trial balance for Bills...Ch. 3 - T ACCOUNTS AND TRIAL BALANCE Sue Jantz started a...Ch. 3 - NET INCOME AND CHANGE IN OWNERS EQUITY Refer to...Ch. 3 - FINANCIAL STATEMENTS Refer to the trial balance in...Ch. 3 - Craig Fisher started a lawn service called Craigs...Ch. 3 - Your friend Chris Stevick started a part-time...
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Text book image
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Text book image
Quickbooks Online Accounting
Accounting
ISBN:9780357391693
Author:Owen
Publisher:Cengage
Text book image
College Accounting, Chapters 1-27 (New in Account...
Accounting
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:Cengage Learning
Text book image
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Text book image
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
The ACCOUNTING EQUATION For BEGINNERS; Author: Accounting Stuff;https://www.youtube.com/watch?v=56xscQ4viWE;License: Standard Youtube License