Using the
Learning Objectives 4, 5
2c. Total Assets $103,700
Abby Perry recently opened her own law office on December 1, which she operates as a sole proprietorship. The name of the new entity is Abby Perry, Attorney. Perry experienced the following events during the organizing phase of the new business and its first month of operation, December 2018. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business.
Dec. 1 | Sold personal investment in Nike stock, which she had owned for several years, receiving $30,000 cash. |
2 | Deposited the $30,000 cash from the sale of the Nike stock in her personal bank account. |
3 | Deposited $89,000 cash in a new business bank account titled Abby Perry, Attorney. The business gave capital to Perry. |
5 | Paid $600 cash for ink cartridges for the printer. |
7 | Purchased computer for the law office, agreeing to pay the account, $8,000, within three months. |
9 | Received $2,900 cash from customers for services rendered. |
15 | Received bill from The Lawyer for magazine subscription, $300. (Use Miscellaneous Expense account.) |
23 | Finished court hearings on behalf of a client and submitted a bill for legal services. $8,000, on account. |
28 | Paid bill from The Lawyer. |
30 | Paid utilities, $900. |
31 | Received $2,800 cash from clients billed on Dec. 23. |
31 | Perry withdrew cash of $3,000. |
Requirements
- Analyze the effects of the preceding events on the accounting equation of Abby Perry, Attorney. Use a format similar to Exhibit 1−5.
- Prepare the following financial statements:
a. Income statement.
b. Statement of owner's equity.
c.
d. Statement of
Want to see the full answer?
Check out a sample textbook solutionChapter 1 Solutions
Horngren's Accounting: The Managerial Chapters (12th Edition) (loose Leaf Version)
- On September 30, 20x4, Daenerys Targaryen and Jon Snow formed a corporation called Snow Dragon, Inc. Following a successful first year, the Board of Directors for Snow Dragon Inc. decides to share some of the company's earnings with the shareholders. Prepare the required journal entries to record the following transactions for Snow Dragon, Inc. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) September October October 18 Snow Dragon, Inc. declared a cash dividend payable to common stockholders of $169,000. 14 Date of record is October 14 for the cash dividend declared on September 18. 31 Snow Dragon Inc. pays the dividend declared on September 18. View transaction list Journal entry worksheet Date Sept 18 2 Snow Dragon, Inc. declared a cash dividend payable to common stockholders of $169,000. 3 4 Note: Enter debits before credits. Record entry General Journal Clear entry Debit Credit > View general journalarrow_forwardYou are an accountant working for a company that has recently decided to incorporate. The company has incurred $4,300 for attorneys fees, promotion costs, and filing fees with the state of incorporation as a part of organizing the corporate entity. What is the journal entry to record these costs on March 13, assuming they are paid in cash?arrow_forwardPrepare the general journal entries for the following transactions. Mr. Laban Deyro opened his laundry business in Iloilo City on January 2, 2016. The following transactions occurred during the month of January 2016: DATE TRANSACTIONS 1/2/16 Invested PHP500,000 to his business. The trade name 1/3/16 Hired Allan and Allie who will manage his business 1/4/16 Collections from various customers for the day- PHP3,000 1/5/16 of the business was "MR. LABANDERO" Purchase store supplies from Labada Store - PHP10,000 1/7/16 Collections from various customers for the day - PHP8,000 1/8/16 MR. LABANDERO entered into an exclusive contract with Sikat Hotel where the business will do all the laundry of the hotel. 1/9/16 Sikat Hotel availed the services of MR. LABANDERO amounting to PHP15,000. Payment will be made on January 20, 2016. 1/10/16 Collections from various customers for the day- PHP12,000 1/12/16 Purchase a washing machine amounting to PHP50,000 1/15/16 Collections from various customersβ¦arrow_forward
- 3. Elitz and Van Aken, CPAS, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending December 31, 2020: 4 Audit Department: Staff Partners Tax Department: Staff Partners Service Small Business Accounting Department: Staff Partners Billable Hours Billable Hours Hourly Rate 22,400 7,900 13,200 5,500 The average billing rate for staff is $160 per hour, and the average billing rate for partners $350 per hour. Prepare a professional fees earned budget for Elitz and Van Aken, CPAS, for the year ending December 31, 2020, using the following column headings and showing the estimated professional fees by type of service rendered and add additional rows in the table as needed: 3,000 600 Total Revenuearrow_forwardI am having trouble with this section of questions, not sure how to set up or fill out properly.... SERIAL PROBLEM: KATEβS CARDS(Note: This is a continuation of the Serial Problem: Kateβs Cards from Chapter 1.)SP2. In September 2019, Kate incorporated Kateβs Cards after investigating different organizational forms,and began the process of getting her business up and running. The following events occurred duringthe month of September 2019:1. Kate deposited $10,000 that she had saved into a newly opened business checking account. Shereceived common stock in exchange.2. Kate designed a brochure that she will use to promote her greeting cards at local stationery stores.3. Kate paid Fred Simmons $50 to critique her brochure before undertaking her final design andprinting.4. Kate purchased a new iMac computer tablet, specialized graphic arts software, and commercialprinter for the company, paying $4,800 in cash. She decided to record all of these items under thesame equipment account.5. Kateβ¦arrow_forwardScenario: Β Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Β Sept 1.Β Β The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. 2.Paid three (3) months rent on a lease rental contract, $6,000. 3.Paid the premiums on the property and peril insurance policies, $3,000. 4.Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. 5.Purchased additional office equipment on account fromβ¦arrow_forward
- 1. A newly founded business performed in their first days of operations, the six transactions that you can find below. The business was founded on the 20th of July, by a young entrepreneur, Mr Grey, who wanted to provide typing, copying, and printing services to the university students in his home city: a) 20/07/2019: In exchange for his investment of $200,000 cash, the business issued to Mr Grey 1,000 shares of capital stock. b) 21/07/2019: Purchased a small building and land for $450,000, paying $165,000 cash and signing a note payable for the balance. The building $210,000 and the land was considered to be worth $240,000. c) 22/07/2019: Purchased office equipment for $30,000 from Office Furniture Co. Paid $17,000 cash and agreed to pay the balance within 60 days. d) 26/7/2019: Purchased from Auto Ltd. a motorcycle on credit for $3,400 to be used for making deliveries to customers. Mr Grey agreed to make payment to Auto Ltd. within 10 days. e) 27/7/2019 Signed a note payable due inβ¦arrow_forwardScenario: Β Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Β Sept 1. Β Β Β Β Β Β Β Β Β The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. Paid three (3) months rent on a lease rental contract, $6,000. Β Β Β Β Β Β Β Β Β Paid the premiums on the property and peril insurance policies, $3,000. Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. Purchased additional office equipment onβ¦arrow_forwardScenario: Β Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Β Sept 1.Β Β The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. 2.Paid three (3) months rent on a lease rental contract, $6,000. 3.Paid the premiums on the property and peril insurance policies, $3,000. 4.Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. 5.Purchased additional office equipment on account fromβ¦arrow_forward
- Scenario: Β Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Β Sept 1.Β The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. 2. Paid three (3) months rent on a lease rental contract, $6,000. 3. Paid the premiums on the property and peril insurance policies, $3,000. 4. Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. 5. Purchased additional office equipment on account fromβ¦arrow_forwardScenario: Β Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Β Sept 1.Β Β The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. Β Paid three (3) months rent on a lease rental contract, $6,000. Β Paid the premiums on the property and peril insurance policies, $3,000. Β Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. Β Purchased additional office equipment onβ¦arrow_forwardScenario: Β Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Β Sept 1. Β Β Β Β Β Β Β Β Β Β The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. Paid three (3) months rent on a lease rental contract, $6,000. Β Β Β Β Β Β Β Β Β Β Paid the premiums on the property and peril insurance policies, $3,000. Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. Purchased additional office equipment onβ¦arrow_forward
- Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengagePrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College