Question

Prepare the four financial statements using the Tabular analysis

John Edwards open his own Dental practice business on Jan 1, 2015. During the first month of operations, the following transactions occurred:

1. John invested $31,000 in cash in the business

2. Paid $1000 for January rent

3. Purchased equipment on account for $3000

4. Performed dental services for clients for cash $8000

5. Borrowed $1000 cash from a bank on a note payable

6. Performed dental services for clients on account $2000

7. Paid salaries $1000

8. Paid utilities $300

9. Paid $100 for advertising with local newspaper

10. John withdrew $1,500 for personal use

Instructions:

1) Prepare a tabular summary of the transactions

2) Prepare the income statement, owner’s equity, and balance sheet at January 30,2015

Answer 1

1

	Asset			=	Liabilities
Transaction	Cash	Account Receivable	Equipment		Account Payable	Note Payable	Owners Equity
1	31000						31000
2	-1000						-1000
3			3000		3000
4	8000						8000
5	1000					1000
6		2000					2000
7	-1000						-1000
8	-300						-300
9	-100						-100
10	-1500						-1500
Total	36100	2000	3000		3000	1000	37100

2) Prepare the income statement, owner’s equity, and balance sheet at January 30,2015

John Edwards
Income statement
Fee earned		10000
Expenses
Rent expense	1000
Salary expense	1000
Utilities expense	300
Advertisement expense	100
Total Expenses		2400
Net Income		7600

John Edwards
Statement of Owner’s Equity
Beginning Capital	0
Add: Investment	31000
Net Income	7600
Less: Withdrawal	1500
Ending Capital	37100

Balance Sheet
Liabilities		Assets
Account Payable	3000	Cash	36100
Note Payable	1000	Account Receivable	2000
Total Liabilities	4000	Equipment	3000
Owner’s Equities	37100
Total Liabilities & Owners Equity	41100	Total assets	41100