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1. T.J. Chan, an engineering consultant, decided to begin a business of his own. Chan has set up the following chart of accounts to be used in his business: 101 Bank 301 T.J. Chan, Capital 302 T.J. Chan, Drawings 110 A/R-M. Armota 111 A/R-F. Morsi 401 Fees Earned 120 Supplies 505 Bank Charges 125 Equipment 510 Car Expense 130 Automobile 515 Miscellaneous Expense 210 A/P-Eustace Bros. 520 Rent Expense 211 A/P-Regal Oil 525 Telephone Expense 530 Wages Expense Transactions 1. On March 1, 20–, when he began his business, he invested in the business a bank balance of $8 000, an automobile worth $14 000, and equipment costing $6 000. 2. Paid $465 to Royalty Trust Co. in payment of the monthly rent. 3. Owner took $200 in cash for personal use. 4. Received a bill in the amount of $900 from Eustace Bros. for office supplies purchased on account. 5. Issued bill to F. Morsi for services performed, $500. 6. Paid cash of $400 to pay the office secretary's weekly wage. 7. Received a bill for $90 from Regal Oil for gasoline and oil used in the business automobile, due in 30 days. 8. $50 in cash had been deducted by the bank from the business's account to cover bank charges for the month. 9. Paid $150 in cash to the City Telephone Company in payment of the telephone bill that arrived today. 10. Issued bill to M. Amota for services performed, $800. 11. Purchased a magazine subscription for the office for $75, paid by cheque. 12. M. Armota made a partial payment of $300 to pay off the amount owed.

1. T.J. Chan, an engineering consultant, decided to begin a business of his own. Chan has set up the following chart of accounts to be used in his business: 101 Bank 301 T.J. Chan, Capital 302 T.J. Chan, Drawings 110 A/R-M. Armota 111 A/R-F. Morsi 401 Fees Earned 120 Supplies 505 Bank Charges 125 Equipment 510 Car Expense 130 Automobile 515 Miscellaneous Expense 210 A/P-Eustace Bros. 520 Rent Expense 211 A/P-Regal Oil 525 Telephone Expense 530 Wages Expense Transactions 1. On March 1, 20–, when he began his business, he invested in the business a bank balance of $8 000, an automobile worth $14 000, and equipment costing $6 000. 2. Paid $465 to Royalty Trust Co. in payment of the monthly rent. 3. Owner took $200 in cash for personal use. 4. Received a bill in the amount of $900 from Eustace Bros. for office supplies purchased on account. 5. Issued bill to F. Morsi for services performed, $500. 6. Paid cash of $400 to pay the office secretary's weekly wage. 7. Received a bill for $90 from Regal Oil for gasoline and oil used in the business automobile, due in 30 days. 8. $50 in cash had been deducted by the bank from the business's account to cover bank charges for the month. 9. Paid $150 in cash to the City Telephone Company in payment of the telephone bill that arrived today. 10. Issued bill to M. Amota for services performed, $800. 11. Purchased a magazine subscription for the office for $75, paid by cheque. 12. M. Armota made a partial payment of $300 to pay off the amount owed.

FINANCIAL ACCOUNTING
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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Prepare an income statement for T.J. Chan as of March 31, 20—

1. T.J. Chan, an engineering consultant, decided to begin a business of his own. Chan has set up the following chart of accounts to be used in his business: 301 T.J. Chan, Capital 302 T.J. Chan, Drawings 101 Bank 110 A/R-M. Armota 111 A/R-F. Morsi 401 Fees Earned 120 Supplies 505 Bank Charges 125 Equipment 510 Car Expense 130 Automobile 515 Miscellaneous Expense 210 A/P-Eustace Bros. 520 Rent Expense 211 A/P Regal Oil 525 Telephone Expense 530 Wages Expense Transactions 1. On March 1, 20–, when he began his business, he invested in the business a bank balance of $8 000, an automobile worth $14 000, and equipment costing $6 000. 2. Paid $465 to Royalty Trust Co. in payment of the monthly rent. 3. Owner took $200 in cash for personal use. 4. Received a bill in the amount of $900 from Eustace Bros. for office supplies purchased on account. 5. Issued bill to F. Morsi for services performed, $500. 6. Paid cash of $400 to pay the office secretary's weekly wage. 7. Received a bill for $90 from Regal Oil for gasoline and oil used in the business automobile, due in 30 days. 8. $50 in cash had been deducted by the bank from the business's account to cover bank charges for the month. 9. Paid $150 in cash to the City Telephone Company in payment of the telephone bill that arrived today. 10. Issued bill to M. Amota for services performed, $800. 11. Purchased a magazine subscription for the office for $75, paid by cheque. 12. M. Armota made a partial payment of $300 to pay off the amount owed.
Transcribed Image Text:1. T.J. Chan, an engineering consultant, decided to begin a business of his own. Chan has set up the following chart of accounts to be used in his business: 301 T.J. Chan, Capital 302 T.J. Chan, Drawings 101 Bank 110 A/R-M. Armota 111 A/R-F. Morsi 401 Fees Earned 120 Supplies 505 Bank Charges 125 Equipment 510 Car Expense 130 Automobile 515 Miscellaneous Expense 210 A/P-Eustace Bros. 520 Rent Expense 211 A/P Regal Oil 525 Telephone Expense 530 Wages Expense Transactions 1. On March 1, 20–, when he began his business, he invested in the business a bank balance of $8 000, an automobile worth $14 000, and equipment costing $6 000. 2. Paid $465 to Royalty Trust Co. in payment of the monthly rent. 3. Owner took $200 in cash for personal use. 4. Received a bill in the amount of $900 from Eustace Bros. for office supplies purchased on account. 5. Issued bill to F. Morsi for services performed, $500. 6. Paid cash of $400 to pay the office secretary's weekly wage. 7. Received a bill for $90 from Regal Oil for gasoline and oil used in the business automobile, due in 30 days. 8. $50 in cash had been deducted by the bank from the business's account to cover bank charges for the month. 9. Paid $150 in cash to the City Telephone Company in payment of the telephone bill that arrived today. 10. Issued bill to M. Amota for services performed, $800. 11. Purchased a magazine subscription for the office for $75, paid by cheque. 12. M. Armota made a partial payment of $300 to pay off the amount owed.
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