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

	Cash					Supplies
Ref.	Debit	Ref.	Credit		Ref.	Debit	Ref.	Credit
a.	10000	b.	4200		g.	250
d. (10*50)	500	h.	1000
f. (10*25)	250
	10750		5200
Bal.	5550
	Prepaid rent				Equipment
Ref.	Debit	Ref.	Credit		Ref.	Debit	Ref.	Credit
b.	4200				c.	2000
					e.	3000
						5000		0
					Bal.	5000
	Accounts payable				Unearned revenue
Ref.	Debit	Ref.	Credit		Ref.	Debit	Ref.	Credit
		c.	2000				f. (10*25)	250
		g.	500
	0		2500
		Bal.	2500
	Misty's capital				Misty's drawings
Ref.	Debit	Ref.	Credit		Ref.	Debit	Ref.	Credit
		a.	10000		h.	1000
		e.	3000
	0		13000
		Bal.	13000
	Service revenue				Supplies expense
Ref.	Debit	Ref.	Credit		Ref.	Debit	Ref.	Credit
		d. (10*50)	500		g.	250
	Trial balance
		Debit	Credit
Cash		5550
Supplies		250
Prepaid rent		4200
Equipment		5000
Accounts payable			2500
Unearned revenue			250
Misty's capital			13000
Misty's drawings		1000
Service revenue			500
Supplies expense		250
Totals		16250	16250