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Assets = Liabilities + Owner’s Equity Cash + Receivable + Supplies + Land = Accounts Payable+ Marilyn Crone Capital Bal. 2,200 1,500 12,000 = 8,000 7,700 During September 2007, the following events occurred. a) Crone inherited $20,000 and deposited the cash in the business bank account. b) Performed service for a client and received cash of $700. c) Paid off the beginning balance of accounts payable. d) Purchased supplies on account, $1,000. e) Collected cash from a customer on account, $1,000. f) Invested personal cash of $1,000 in the business. g) Consulted for a Senate candidate and billed the client for services rendered, $3,000. h) Recorded the following business expenses for the month: 1. Paid office rent $900. 2. Paid advertising, $100. i) Sold supplies to another business for $100 cash, which was the cost of the supplies. j) Withdrew cash of $1,500 for personal use. Requirements 1. Analyze the effects of the preceding transactions on the accounting equation of Best Foot Forward. Adapt the format of Exhibit 1-7, page 18. 2. Prepare the income statement of Best Foot Forward for the month ended September 30, 2007. List expenses in decreasing order by amount. (p. 20) 3. Prepare the entity’s statement of owner’s equity for the month ended September 30, 2007. (p. 20) 4. Prepare the balance sheet at September 30, 2007 (p. 20)

Assets = Liabilities + Owner’s Equity

Cash + Receivable + Supplies + Land = Accounts Payable+ Marilyn Crone Capital

Bal. 2,200 1,500 12,000 = 8,000 7,700

 

During September 2007, the following events occurred.

 

  • a) Crone inherited $20,000 and deposited the cash in the business bank account.
  • b) Performed service for a client and received cash of $700.
  • c) Paid off the beginning balance of accounts payable.
  • d) Purchased supplies on account, $1,000.
  • e) Collected cash from a customer on account, $1,000.
  • f) Invested personal cash of $1,000 in the business.
  • g) Consulted for a Senate candidate and billed the client for services rendered, $3,000.
  • h) Recorded the following business expenses for the month:

1. Paid office rent $900.

2. Paid advertising, $100.

i) Sold supplies to another business for $100 cash, which was the cost of the supplies.

j) Withdrew cash of $1,500 for personal use.

 

Requirements

1. Analyze the effects of the preceding transactions on the accounting equation of Best Foot Forward. Adapt the format of Exhibit 1-7, page 18.

2. Prepare the income statement of Best Foot Forward for the month ended September 30, 2007. List expenses in decreasing order by amount. (p. 20)

3. Prepare the entity’s statement of owner’s equity for the month ended September 30, 2007. (p. 20)

4. Prepare the balance sheet at September 30, 2007 (p. 20)

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