Question

Misty Mark, an infamous archer, decided to open an archery and fitness business called Bows and Biceps. The following is a list of transactions for Bows and Biceps for the first month. Put the transactions in a T account ledger and then create a trial balance, Income Statement, Statement of Owner’s Equity, and Balance Sheet on 5/31/20.

1. 5/1/2020 - Deposited $10,000 into a bank account in the name of the business.
2. 5/1/2020 - Signed a one-year lease for a building and paid the first six month’s rent of $4,200.
3. 5/2/2020 - Bought equipment from Archery Supply, Inc for $2,000.
4. 5/10/2020 - Enrolled 10 students in a Bow Hunting for Beginners class to be held on 5/29. Each student paid $50 for the class
5. 5/15/2020 - Misty gives her personal exercise equipment with a fair market value of $3,000 to the business.
6. 5/25/2020 - Enrolled 10 students in a Fit to Shoot class to be held next month. Each student paid $25 for the class.
7. 5/28/2020 - Purchased $500 in office supplies from Andy’s Office Supply on credit. Half of the supplies were used immediately, the other half was stored in the supply closet for future use.
8. 5/31/2020 - Misty withdraws $1,000 to take a vacation after working so hard to set up the business.

Answer 1

1. Journal entries:

2. T account ledger

3. Trial balance

4. Income statement

5. Balance sheet