In: Accounting
Jack Thyme opened Thyme Company, a veterinary business
on August 1, 2017. On August 31, the balance sheet showed Cash
$9,000; Accounts Receivable $1,700; Supplies $600; Equipment
$5,000; Accounts Payable $3,600; Common Stock $10,000; and
Retained Earnings $2,700. During September, the following
transactions occurred.
Sept. 2 Paid $3,400 cash for accounts payable due.
5 Received $1,200 from customers in payment of accounts
receivable.
8 Purchased additional office equipment for $5,100, paying
$1,000 in cash and the balance on account.
13 Performed services worth $10,600, of which $2,300 is paid
in cash and the balance is due in October.
17 Paid a $600 cash dividend.
22 Paid salaries $900, rent for September $1,100, and
advertising expense $250.
26 Incurred utility expenses for the month on account $220.
30 Received $5,000 from Ben Bank on a 6-month note
payable.
Instructions
(a) Prepare a tabular analysis of the September transactions
beginning with August 31 balances. The column headings should
be: Cash + Accounts Receivable + Supplies + Equipment = Notes
Payable + Accounts Payable + Common Stock + Retained
Earnings + Revenues – Expenses – Dividends. Include margin
explanations for any changes in Retained Earnings.
(b) Prepare an income statement for September, a retained earnings
statement for September, and a classified balance sheet at
September 30, 2017.
Analyze transactions
and prepare an income
statement, retained
earnings statement, and
balance sheet.
(a)
accounting equation :
date | cash | AR | Supplies | Equip | = | NP | AP | CS | RE | Rev | Exp | Div |
OB | 9000 | 1700 | 600 | 5000 | = | 3600 | 10000 | 2700 | ||||
Sep 2 | -3400 | = | -3400 | |||||||||
5 | 1200 | -1200 | = | |||||||||
8 | -1000 | 5100 | = | 4100 | ||||||||
13 | 2300 | 8300 | = | 10600= | 10600 | |||||||
17 | -600 | = | -600 = | -600 | ||||||||
22 | -2250 | = | -2250 = | -2250 | ||||||||
26 | = | 220 | -220 = | -220 | ||||||||
30 | 5000 | = | 5000 | |||||||||
Total | 10250 | 8800 | 6000 | 10100 | = | 5000 | 4520 | 10000 | 10230= | 10600 | 2470 | 600 |
(b)
Income Statement :
revenue | $10600 |
Less: | |
salaries | 900 |
rent | 1100 |
advertisement | 250 |
Utility |
220 |
Total expenses | 2470 |
Net Income | 8130 |
Less: Divided | -600 |
To Retained Earnings | 7530 |
Balance Sheet :
Assets | Amount $ |
Cash | 10250 |
AR | 8800 |
Supplies | 600 |
Equipment | 10100 |
Total Assets | 29750 |
Liabilities and SH Equity: | Amount $ |
AP | 4520 |
NP | 5000 |
CS | 10000 |
RE = 2700 + Net Income 7530 - Div 600= | 10230 |
Total Liabilities and SH Equity= | $29750 |