Question

1. Arrange the following asset, liability, and equity titels in a table. Cash: accounts receivable; office supplies, office equiptment: roofing equipment; accounts payable; r.rivers capital; r river withdrawl; revenues; and expenses

2. Use additional and subtractions to show the effects of each transaction on the accounts in the accouting equation. Show ner balances after each transaction

3. Use the increases and decreases in the columns of the table from part 2 to prepare an incomes statement, a statement of owner's equity, and a statement of cash flows - each of these for the current month. Also prepare a balance sheet as of the end of the month.

4. Assume that $5,000 purchase of roofing equipment on July 3 was financed from an owner investment of another $5,000 cash in the business (Instead of the purchase conditions descried in the transaction). explain the effect of this change on total assets, total liabilities, and total equity.

Rivera Roofing Company, owned by Reyna Rivera, began operations in July and completed these transactions during that first month of operations.

July 1 Reyna Rivera invested $80,000 cash in the company.
2 The company rented office space and paid $700 cash for the July rent.
3 The company purchased roofing equipment for $5,000 by paying $1,000 cash and agreeing to pay the $4,000 balance in 30 days.
6 The company purchased office supplies for $600 cash. 8 The company completed work for a customer and immediately collected $7,600 cash for the work.
10 The company purchased $2,300 of office equipment on credit.
15 The company completed work for a customer on credit in the amount of $8,200.
17 The company purchased $3,100 of office supplies on credit.
23 The company paid $2,300 cash for the office equipment purchased on July 10.
25 The company billed a customer $5,000 for work completed; the balance is due in 30 days.
28 The company received $8,200 cash for the work completed on July 15.
30 The company paid an assistant’s salary of $1,560 cash for this month.
31 The company paid $295 cash for this month’s utility bill. 31 Reyna Rivera withdrew $1,800 cash from the company for personal use.

Answer 1

	Balance Sheet
Event	Assets										Liabilities		Equity
	Cash	+	Accounts receivable	+	Office supplies	+	Office equipment	+	roofing equipment	=	Accounts payable	+	River capital	-	River withdrawl	+	Revenue	-	Expenses
July 1	80000												80000
July 2	-700																		700
July 3	5000												5000
July 3	-5000								5000
July 6	-600				600
July 10							2300				2300
July 15			8200														8200
July 17					3100						3100
July 23	-2300										-2300
July 25			5000														5000
July 28	8200		-8200
July 30	-1560																		1560
July 31	-295																		295
July 31	-1800														1800
Total	80945		5000		3700		2300		5000		3100		85000		1800		13200		2555

Income statement
Sales revenue		13200
Rent expense		700
Salaries expense		1560
Utility expenses		295
Total expenses		2555
Net income		10645

Statement of owners equity
Investment		80000
Cash investment		5000
Net income		10645
Withdrawl		-1800
Closing balance		93845

Cash received from customers	8,200
Cash paid to suppliers and employees	-3,155
Cash flow from operations	5,045
Cash paid for office equipment	-2,300
Cash paid for roofing equipment	-5,000
Net cash used in investing activities	-7,300
Cash contribution from proprietor	85,000
Cash withdrawl by proprietor	-1,800
Net cash used in financing activities	83,200
Net change in cash	80,945
Opening cash balance	-
Closing cash balance	80,945