1 Capital invested $20,000 1 Paid $1,000 first month\'s rent 1 Spent $10,000 for
ID: 2499698 • Letter: 1
Question
1 Capital invested $20,000
1 Paid $1,000 first month's rent
1 Spent $10,000 for office equipment
1 Beginning inventory $4,000
2 Merchandise sold for $3,000
2 Cost of sales $2,000
5 Spent $1,000 for office supplies
9 2% discounts collected
12 Inventory increase valued at $4,000
15 January 1st purchase paid off with $4,000
16 Units sold valued at $1,500
16 Cost of sales $1,100
19 Office Expenses charged to $250
20 Paid for advertising $100
27 Collected $1,500 with no discount
29 Units sold valued at $4,500
30 Cost of sales $3,300
30 Miscellaneous purchases valued at $100
31 Paid telephone bill $150
31 Paid electric bill $200
31 Depreciation on office furniture
31 Cost of sales $250
During the past several months, you have decided to make some changes in your life. You have always wanted to open your own small business and have decided you finally will. You have decided you will open your own merchandising business on January 1, 2016.
During your planning for this Grand Opening, you made the following decisions for your business.
You will fund the opening of your business with a transfer from your personal bank account to the business bank account in the amount of $20,000 on Jan 1.
You have already signed a lease for a building for a monthly rent of $1000 and your first rental payment is due on Jan 1.
You will use a Perpetual inventory system and the LIFO method to account for your inventory.
You will sell your product to all customers on account. Your terms for all customers are 2/10, n/30.
To start out, you don’t plan on hiring any employees.
Assignment
Statement of Owner’s Equity, Classified Balance Sheet
Explanation / Answer
Statement of owner's Equity $ Balance as om January 1, 2016 20000 Add: Retalines Earnings 406.67 Balance as on 31st jan, 2016 20406.67 Balance Sheet as on 31st Jan, 2016 $ $ $ ASSETS Current asset cash 7640 accounts receivable 4500 office supplies 750 inventory 1600 Total current assets 14490 NON CURRENT ASSETS Office equipment 10000 less: Accumulated depreciation 83.33 Total Non Current Assets 9916.67 Total Assets 24406.67 LIABILITIES Current Liability Accounts payable 4000 Total Liabilities 4000 Owner's Equity Capital 20000 Retained earnings 406.67 Total Owner's equity 20406.67 Total owner's equity and liabilities 24406.67
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