In: Accounting
Hipster Optical Trial Balance May 31, 2017 |
Acct. No | Account Title | Debit | Credit | ||||
101 | Cash | $ | 17,700 | ||||
106 | Accounts receivable | 7,680 | |||||
124 | Office supplies | 5,600 | |||||
128 | Prepaid insurance | 9,020 | |||||
163 | Office equipment | 24,800 | |||||
201 | Accounts payable | $ | 1,520 | ||||
230 | Unearned service revenue | 7,000 | |||||
301 | Peeta Black, capital | 55,500 | |||||
302 | Peeta Black, withdrawals | 1,400 | |||||
403 | Services revenue | 21,200 | |||||
623 | Wages expense | 14,200 | |||||
640 | Rent expense | 3,500 | |||||
690 | Utilities expense | 1,320 | |||||
Totals | $ | 85,220 | $ | 85,220 | |||
Required:
Using the trial balance provided above, prepare an income statement
and statement of changes in equity for the first month ended May
31, 2017, and a balance sheet at May 31, 2017.
Analysis Component:
Upon review of the trial balance, the balance at May 31, 2017 for
utilities expense is $1,320. Create a journal entry that might have
created this balance. Create a second entry when the May utility
bill is to be paid in the next month. (If no entry is
required for a transaction/event, select "No journal entry
required" in the first account field.)
The balance in the utilities expense account could have arisen on
account of one of the following entries.
Hipster Optical | ||
Income Statement | ||
For the Month Ended May 31, 2017 | ||
Services revenue | 21200 | |
Less: Expenses | ||
Wages expense | 14200 | |
Rent expense | 3500 | |
Utilities expense | 1320 | |
Total expense | 19020 | |
Net income $ | 2180 |
Hipster Optical | ||
Statement of Changes in Equity | ||
For the Month Ended May 31, 2017 | ||
Peeta Black, capital, May 1, 2017 | 0 | |
Add: Capital invested | 55500 | |
Net income | 2180 | 57680 |
57680 | ||
Less: Withdrawals | 1400 | |
Peeta Black, capital, May 31, 2017 | 56280 |
Hipster Optical | |
Balance Sheet | |
At May 31, 2017 | |
Assets | |
Cash | 17700 |
Accounts receivable | 7680 |
Office supplies | 5600 |
Prepaid insurance | 9020 |
Office equipment | 24800 |
Total assets $ | 64800 |
Liabilities and Owner's Equity | |
Accounts payable | 1520 |
Unearned service revenue | 7000 |
Peeta Black, Capital | 56280 |
Total liabilities and owners' equity $ | 64800 |
Analyze:
Account Titles and Explanation | Debit | Credit | |
1 | Utilities expense | 1320 | |
Cash | 1320 | ||
(To record utilities expense paid) | |||
2 | Utilities expense | 1320 | |
Accounts payable | 1320 | ||
(To record utilities expense incurred but unpaid) |