Bundle: College Accounting, Chapters 1-15, 22nd + Study Guide with Working Papers + CengageNOWv2™, 1 term Printed Access Card
Bundle: College Accounting, Chapters 1-15, 22nd + Study Guide with Working Papers + CengageNOWv2™, 1 term Printed Access Card
22nd Edition
ISBN: 9781337379762
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Chapter 3, Problem 14SPB

NET INCOME AND CHANGE IN OWNER’S EQUITY Refer to the trial balance of Jantz Plumbing Service in Problem 3-13B to determine the following information. Use the format provided below.

Chapter 3, Problem 14SPB, NET INCOME AND CHANGE IN OWNERS EQUITY Refer to the trial balance of Jantz Plumbing Service in

1. a

Expert Solution
Check Mark
To determine

Determine the total revenue for the month of August.

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 August:

Total revenue for the month of August = (Service revenue + Revenue earned on account + Service fees)($3,000 +$4,000 + $2,800)=$9,800

Conclusion

Hence, the total revenue for the month of August is $9,800.

1.b

Expert Solution
Check Mark
To determine

Determine the total expenses for the month of August.

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 August:

Total expenses for the month of August = (Rent expense + Wages expense + Phone expense +Advertising expense)($700 + $500 + $100 + $2,000)=$3,300

Conclusion

Hence, the total expense for the month of August is $3,300.

1.c

Expert Solution
Check Mark
To determine

Determine the net income for the month of August.

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 August:

Net income for the month of August = (Total revenuesTotal expenses)($9,800$3,300)=$6,500

Conclusion

Hence, the net income for the month of August is $6,500.

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:

J Plumbing Repair
Statement of Owner’s Equity
For Month Ended August 31, 20--
ParticularsAmount ($)Amount ($)
Invested cash in the business 30,000
Add: Net income for August6,500 
Less: Withdrawals for August(3,000)
Increase in capital 3,500
Ending owner’s equity $33,500

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$38,000  = $4,500       +$33,500

Working note:

Calculate the amount of assets:

Assets = (Cash + Accounts receivable + Office supplies + Prepaid insurance + Plumbing equipment + Van)=($20,200+$2,700+$300+$800+$6,000+$8,000)=$38,000

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Chapter 3 Solutions

Bundle: College Accounting, Chapters 1-15, 22nd + Study Guide with Working Papers + CengageNOWv2™, 1 term Printed Access Card

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...
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