Question

Problem 1-9A
Lina Aragon started a new business and completed the following transactions during December
Dec 1 Lina transferred $65,000 cash from a personal savings account to a checking account in the name      of Aragon Electric
2.  The company rented office space and paid $1,000 cash for December rent
3.  The company purchased $13,000 of electrical equipment by paying $4,800 cash and agreeing to  
               To pay the $8,200 balance in 30 days.
5. The company purchased office supplies by paying $800 cash
6. The company completed electrical work and immediately collected $1,200 cash for these services
8. The purchased $2,530 of office equipment on credit
15. The company electrical work on credit in the amount of $5,000
18. the company purchased $350 of office supplies on credit
20.  The company paid $2,530 cash for the office equipment purchased on December 8
24. The company received $5,000 cash for the work completed on December 15
29.  The company paid the assistant’s salary of $1,400 cash for this month
30. The company paid $540 cash for this month’s utility bll
31. Lina withdrew $950 cash from the company for personal use.
REQUIRED
Analyze the above transaction using an Analysis Table. Show the balance for each transaction
Prepare
Statement of Equity and
Balance Sheet as of end of December
Problem 1-9B
Pereza Roofing Company owned by Gerson Perez, began operations in July and completed the transactions during that first month of operations
July 1. Perez 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. To pay for this equipment, Perez invested an additional
             $5,000 cash into the business ( using his Salary from his part time second job)
         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 $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 customer 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. Perez withdrew $1,800 cash from the company for personal use
REQUIRED.  Prepare an analysis table. Use the totals at the end of the month to determine Statement of Equity  and then Draw Balance Sheet
      

Answer 1

The accounting equation in accounts as per accounting principle is given below

Assets = Liabilities + owners equity

Important to note is every entry has double effect there will be debit show in positive amount and credit is shown in negative amount the analysis table below

	Assets			=	liabilities	+	owners equity							explanation
Date	cash	equipment	accounts receivable		accounts payable		owners capital	-	owners drawings	+	Revenues	-	Expenses
1-Dec	$65,000						$65,000							Lina has contributed capital to business and depositing cash
2-Dec	-$1,000												-$1,000	rent is expenses and is paid by cash
3-Dec	-$4,800	$13,000			$8,200									equipment is asset purchased by paying $4800 cash and balance is accounts payable (purchased on credit)
5-Dec	-$800												-$800	office supplies is expenses and purchased by paying cash
6-Dec	$1,200										$1,200			sales revenue of $1200 received in cash
8-Dec		$2,530			$2,530									purchased equipment on credit
15-Dec			$5,000								$5,000			service revenue as complated and billing done on credit terms
18-Dec					$350								-$350	office suplies purchased on credit
20-Dec	-$2,530				-$2,530									payment for purcahsed made on credot on dec 8
24-Dec	$5,000		-$5,000											payment received for billing done on 15 dec
29-Dec	-$1,400										-$1,400			assistant salary is expenses paid in cash
30-Dec	-$540										-$540			paid utility bill by cash
31-Dec	-$950								-$950					lina withdrew money for personal use which is shown as owners drawing
	$59,180	$15,530	$0		$8,550		$65,000		-$950		$4,260		-$2,150

The statement of owners equity is shown below

Aragon electric
Statement of owners equity
For the year ended December 31, 20XX
Lina , capital	$65,000
Add
net income	$2,110
Total	$67,110
Less -: drawings	$950
Lina , capital-Dec 31,20XX	$66,160

Note

Calculation of net profit

Net profit = revenues – expenses

Statement of balance sheet as on December 31, 20XX of Aragon Electric is given below

Balance sheet shows as on date assets and liabilities of the firm and one of important financial statement

Aragon electric
Balance sheet
As on date december 31, 20XX
Assets
current assets
cash	$59,180
total current assets		$59,180
Fixed assets
equipments	$15,530
Total fixed assets		$15,530
Total assets		$74,710
Liabilities
Current liabilities
accounts payable	$8,550
Total current liabilities		$8,550
Long term liabilities		0
Total liabilities		$8,550
Owners equity
Lina , capital-Dec 31,20XX		$66,160
Total liabilities and owners equity		$74,710