Question

Darby consulting was established on 1 March and during March Darby entered into the following transactions:

1 Issued $10000 shares in exchange for cash

3 Purchased $300 of supplies on account

7 Prepaid $1500 rent for April, May and June

8 Paid $175 towards 3 March purchase of supplies

11 Billed customers $5780 for services rendered

12 Paid $700 for March advertising

25 Received $4500 from customers billed on March 11

28 Paid $200 in dividends to shareholders

29 Paid $1200 in March salaries

29 Paid $760 for water usage

Prepare a balance sheet for the end of March.

Answer 1

		Balance Sheet
	Liabiliites	Amt.	Assets	Amt.
	Share Capital	10000	Prepaid Rent	1500
	Income transferred	2,620	Cash	9,965
	Less: Dividend Paid		Debtor (5780-4500)	1280
	Vendor (300-175)	125
	Total	12745		12745
	Journal Entry
Date	Particulars	Debit	credit
1	Cash A/C	10,000
	Share Capital		10,000
3	Supplies A/C	300
	Vendor A/C		300
7	Prepaid rent A/C	1,500
	Cash A/C		1,500
8	Vendor A/C	175
	Cash A/C		175
11	Customer A/C	5,780
	Service revenue		5,780
12	Advertising A/C	700
	Cash A/C		700
25	Cash A/C	4,500
	Customer A/C		4,500
28	Dividend A/C	200
	Cash A/C		200
29	Salaries A/C	1,200
	Cash A/C		1,200
29	Water usage A/C	760
	Cash A/C		760
		25,115	25,115
		Income Statement
	Revenue	5,780
	Less: Expenses
	Supplies	300
	Advertising	700
	Salaries	1,200
	Water Wastage	760
	Total Expenses	2960
	Income avilable for shareholder	2,820
	Less: Dividend Paid	200
	Income transferred to balance Sheet	2,620
		Cash A/C
	Cash received
	Issue of shares	10,000
	Cash received from revenue	4,500
	Total Cash received	14,500
	Less: Cash Expenses
	Prepaid rent	1500
	Paid for supplies	175
	Advertising	700
	Dividend	200
	Salaries	1200
	water Usage	760
	Total Cash Paid	4535
	Net Cash Balance	9,965