Question

Pam Jones owns a business named Sunny Renovation. Below is the account information of Sunny Renovation at 30 June 2019.

Cash in Bank	$ 45,600		Accounts receivable	$235,200
Supplies	52,800		Prepaid Insurance	16,000
Accounts payable	67,400		Unearned revenue	18,000
Service income	372,000		Salary expense	222,000
Pam Jones, Capital	?		Equipment	130,000

  
Required:
Using the accounting equation, prepare the balance sheet for Sunny Renovation at 30 June 2019 (please use the narrative/vertical format).

You may wish to copy the table below for use in your answer.

Answer 1

Solution:

Statement of Balance Sheet [Vertical Format]

Sunny Renovation
Balance sheet
As on 30th June 2019.
Assets
Current assets:
Cash in Bank	$    45,600
Supplies	$    52,800
Prepaid Insurance	$    16,000
Accounts Receivable	$ 235,200
Total Current Assets		$        349,600
Property,plant, and equipment:
Equipment		$        130,000
Total Assets		$        479,600
Liabilities and stockholder's Equity
Current liabilities:
Accounts Payable	$    67,400
Unearned Revenue	$    18,000
Total Liabilities		$          85,400
Equity:
Pam Jones, Capital {Balancing Figure}[Note:1]	$ 394,200
Total Owner`s Equity		$        394,200
Total liabilities and stockholder's equity		$        479,600

Notes:

1) Accounting Equation:

Assets = Liabilities + Equity

$ 479,600 = $85,400 + Equity

Equity = $479,600 - $85,400 = $394,200

2) Service income and salary expense are not useful in accounting equation to find Pam Jones, Capital.