Jack Thyme opened Thyme Company, a veterinary business on August 1, 2017. On Aug
ID: 2606734 • Letter: J
Question
Jack Thyme opened Thyme Company, a veterinary business
on August 1, 2017. On August 31, the balance sheet showed Cash
$9,000; Accounts Receivable $1,700; Supplies $600; Equipment
$5,000; Accounts Payable $3,600; Common Stock $10,000; and
Retained Earnings $2,700. During September, the following
transactions occurred.
Sept. 2 Paid $3,400 cash for accounts payable due.
5 Received $1,200 from customers in payment of accounts
receivable.
8 Purchased additional office equipment for $5,100, paying
$1,000 in cash and the balance on account.
13 Performed services worth $10,600, of which $2,300 is paid
in cash and the balance is due in October.
17 Paid a $600 cash dividend.
22 Paid salaries $900, rent for September $1,100, and
advertising expense $250.
26 Incurred utility expenses for the month on account $220.
30 Received $5,000 from Ben Bank on a 6-month note
payable.
Instructions
(a) Prepare a tabular analysis of the September transactions
beginning with August 31 balances. The column headings should
be: Cash + Accounts Receivable + Supplies + Equipment = Notes
Payable + Accounts Payable + Common Stock + Retained
Earnings + Revenues – Expenses – Dividends. Include margin
explanations for any changes in Retained Earnings.
(b) Prepare an income statement for September, a retained earnings
statement for September, and a classified balance sheet at
September 30, 2017.
Analyze transactions
and prepare an income
statement, retained
earnings statement, and
balance sheet.
Explanation / Answer
(a)
accounting equation :
(b)
Income Statement :
220
Balance Sheet :
date cash AR Supplies Equip = NP AP CS RE Rev Exp Div OB 9000 1700 600 5000 = 3600 10000 2700 Sep 2 -3400 = -3400 5 1200 -1200 = 8 -1000 5100 = 4100 13 2300 8300 = 10600= 10600 17 -600 = -600 = -600 22 -2250 = -2250 = -2250 26 = 220 -220 = -220 30 5000 = 5000 Total 10250 8800 6000 10100 = 5000 4520 10000 10230= 10600 2470 600Related Questions
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