Question

Peter Nimmer opened a veterinary business in Nashville, Tennessee, on August 1, 2017. On August 31, the balance sheet showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable $3,600, and Owner’s Capital $13,700. During September, the following transactions occurred.

1. Paid $2,900 cash on accounts payable.
2. Purchased additional equipment for $2,100, paying $800 in cash and the balance on account.
3. Recognized revenue of $7,800, of which $2,500 is received in cash and the balance is due in October.
4. Withdrew $1,100 cash for personal use.
5. Paid salaries $1,700, rent for September $900, and advertising expense $450.
6. Incurred utilities expense for month on account $170.
7. Received $10,000 from Capital Bank (money borrowed on a note payable).

Instructions

1. (a) Prepare a tabular analysis of the September transactions beginning with August 31 balances. The column headings should be as follows: Cash 1 Accounts Receivable 1 Supplies 1 Equipment 5 Notes Payable 1 Accounts Payable 1 Owner’s Capital 2 Owner’s Drawings 1 Revenues 2 Expenses.
2. (b) Prepare an income statement, Owner Equity y Balance Sheet for September 30.

Answer 1