5-Carla Quentin started her own consulting firm, Quentin Consulting, on May 1, 2

Question

5-Carla Quentin started her own consulting firm, Quentin Consulting, on May 1, 2012. The following transactions occurred during the month of May May 1 Carla invested $7,000 cash in the business. 2 Paid $900 for office rent for the month 3 Purchased $600 of supplies on account 5 Paid $125 to advertise in the County News. 9 Received $4,000 cash for services provided 12 Withdrew $1,000 cash for personal use 15 Performed $5,400 of services on account 17 Paid $2,500 for employee salaries 20 Paid for the supplies purchased on account on May 3 23 Received a cash payment of $4,000 for services provided on account on May 15 Instructions (a)Show the effects of the previous transactions on the accounting equation using the following format.(10 marks) Assets Liabilities Owner's Equity Date Cash +Account +Suppliers+Equipment Accounts +Owners-Owner's +Revenue-Expense Receivable Payable Capital Drawing Marking scheme: (5 marks) Proper Accounting equation (1 mark each) 5 marks)Recording transaction (b)Prepare an income statement for the month of May.(5 marks) (c)Prepare a balance sheet at May 31, 2012.( 5 marks) Marking scheme for preparing Income statement & Balance Sheet 0 Unsatisfactory-Shows little to no understanding of the principles in journalizing transactions 1-2 Partially Proficient-Shows basic understanding of the principles in journalizing transactions. 3-4 Proficient-Shows good understanding of the principles in journalizing transactions. 5 Advanced-Shows well developed understanding of the principles in journalizing transactions

Explanation / Answer

Assets Date Cash Acc Rec Suppliers Equipment Acc payable owner cap owner draw Revenue Expenses 1-May $7,000 7000 2-May -900 -900 900 3-May 600 600 5-May -125 -125 125 9-May 4000 4000 4000 12-May -1000 1000 15-May 5400 5400 5400 17-May -2500 -2500 2500 20-May -600 -600 23-May 4000 -4000 $9,875 $1,400 $600 $0 $0 $12,875 $1,000 $9,400 $3,525 Ans b Income statement Service revenue $9,400 Less: Operating expenses Rent expenses $900 Adverising expenses 125 Salaries expenses 2500 Total operating expenses` $3,525 Net income $5,875 Balance Sheet As ay May 31 2012 Assets Current Assets Cash $9,875 Accounts receivable $1,400 Supplies $600 Total Assets $11,875 Liabilities & owner equity Owner equity (12875-1000) 11875 If any doubt please comment

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