Marilyn Miller opened a floral shop using $5,000 of her own cash savings and wit
ID: 2465341 • Letter: M
Question
Marilyn Miller opened a floral shop using $5,000 of her own cash savings and with $15,000 in cash borrowed from her parents. She signed a lease on a small store for one year, agreeing to pay $350 per month in rent. During the first year of operations, Marilyn purchased fresh flowers from a local nursery for $2,500 paid $1,200 for utilities. She generated floral sales totaling $12,000.
(Assume all transactions were cash transactions)
Enter each of the above events in to the balalnce sheet equation as illustrated in the chapter.
Hint: For this worksheet, make sure to enter all expense items as negative amounts.
Hint: The transactions represent one year of operations.
Marilyn Floral 1 2 3 4 5 6 Totals Assets Cash Total Assets Liabilities Notes payable Total liabilities Shareholders equity Contributed Capital (Stock) Retained earnings Revenue Rent Expense Floral Expense Utilities Expense Total shareholders equity MARILYN FLORAL INCOME STATEMENT BALANCE SHEET REVENUE ASSETS OPERATING EXPENSES Cash Rent TOTAL ASSETS Floral LIABILITIES Utilities Note Payable NET INCOME EQUITY Contributed Capital (Stock) Retained Earnings TOTAL LIAB. AND EQUITYExplanation / Answer
Marilyn Floral
1
2
3
4
5
6
Totals
Assets
Cash
$5,000.00
$15,000.00
-$4,200.00
-$2,500.00
-$1,200.00
$12,000.00
$24,100.00
Total Assets
$24,100.00
Liabilities
Notes payable
$15,000.00
$15,000.00
Total liabilities
$15,000.00
Shareholder’s equity
Contributed Capital (Stock)
$5,000.00
$5,000.00
Retained earnings
Revenue
$12,000.00
$12,000.00
Rent Expense
-$4,200.00
-$4,200.00
Floral Expense
-$2,500.00
-$2,500.00
Utilities Expense
-$1,200.00
-$1,200.00
Total shareholder’s equity
$9,100.00
MARILYN FLORAL INCOME STATEMENT
REVENUE
$12,000.00
OPERATING EXPENSES
Rent
-$4,200.00
Floral
-$2,500.00
Utilities
-$1,200.00
NET INCOME
$4,100.00
MARILYN FLORAL BALANCE SHEET
ASSETS
Cash
$24,100.00
TOTAL ASSETS
$24,100.00
LIABILITIES
Note Payable
$15,000.00
EQUITY
Contributed Capital (Stock)
$5,000.00
Retained Earnings
$4,100.00
TOTAL LIAB. AND EQUITY
$24,100.00
Marilyn Floral
1
2
3
4
5
6
Totals
Assets
Cash
$5,000.00
$15,000.00
-$4,200.00
-$2,500.00
-$1,200.00
$12,000.00
$24,100.00
Total Assets
$24,100.00
Liabilities
Notes payable
$15,000.00
$15,000.00
Total liabilities
$15,000.00
Shareholder’s equity
Contributed Capital (Stock)
$5,000.00
$5,000.00
Retained earnings
Revenue
$12,000.00
$12,000.00
Rent Expense
-$4,200.00
-$4,200.00
Floral Expense
-$2,500.00
-$2,500.00
Utilities Expense
-$1,200.00
-$1,200.00
Total shareholder’s equity
$9,100.00
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