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Chapter 2: 40PGB_3 (page 112)

Question:Preparing financial statements from the trial balance and calculating the debt ratio

Preparing financial statements from the trial balance and calculating the debt ratio

Account Title Debit Credit

Office Supplies 1,400

Cash 32,000

Accounts Receivable 9,100

Prepaid Insurance 2,600

Equipment 24,000

Accounts Payable 3,400

Unearned Revenue 1,296

Notes Payable 34,000

Common Stock 20,000

Dividends 3,000

Salaries Expense 1,600

Rent Expense 700

Utilities Expense 100

Service Revenue 15,804

Total Balance \( 74,500 \) 74,500

Requirements Prepare the balance sheet as of July 31, 2018.

Short Answer

Expert verified

The balance sheet shows assets, liabilities and stockholders鈥� equity of the business and the total of balance sheet is $69,100

Step by step solution

01

Step-by-step SolutionStep 1: Definition of Balance Sheet

The balance sheet is defined as the financial statement which reports the financial position of the business

02

Preparation of Balance Sheet

Sheila Sanchez, Registered Dietician

Balance Sheet

July 31, 2018

Assets

Amount ($)

Liabilities

Amount ($)

Cash

$32,000

Accounts Payable

$3,400

Accounts Receivables

$9,100

Unearned Revenue

$1,296

Office Supplies

$1,400

Notes Payable

$34,000

Prepaid Insurance

$2,600

Equipment

$24,000

Stockholders鈥� Equity

Common stock

$20,000

Retained Earnings

$10,404

Total Assets

$69,100

Total Liabilities and stockholders鈥� Equity

$69,100

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Most popular questions from this chapter

What is involved in the posting process?

What is the difference between the trial balance and the balance sheet?

Question:Preparing financial statements from the trial balance and calculating the debt ratio

Preparing financial statements from the trial balance and calculating the debt ratio

Account Title Debit Credit

Office Supplies 1,400

Cash 32,000

Accounts Receivable 9,100

Prepaid Insurance 2,600

Equipment 24,000

Accounts Payable 3,400

Unearned Revenue 1,296

Notes Payable 34,000

Common Stock 20,000

Dividends 3,000

Salaries Expense 1,600

Rent Expense 700

Utilities Expense 100

Service Revenue 15,804

Total Balance \( 74,500 \) 74,500

Requirements 4. Calculate the debt ratio as of July 31, 2018.

Question: E2-20 Analyzing transactions from T-accounts The first nine transactions of North-West Airplane Repair have been posted to the T-accounts. Provide an explanation for each of the nine transactions. Learning Objective 3 Total Debits $191,800 Cash (1) 370,000 (3) 260,000 (9) 21,000 360,000 (2) 1,200 (5) 1,500 (6) 3,900 (7) 7,000 (8) ASSETS Accounts Payable LIABILITIES EQUITY Retained Earnings Notes Payable Office Supplies Building Common Stock Contributed Capital Dividends Salaries Expense Property Tax Expense Service Revenue Rent Expense = + = + 鈭� + + 鈭� (4) 1,500 (2) 360,000 (5) 1,200 1,50 (4) 0 260,000 (3) 370,000 (1) (8) 7,000 21,000 (9) (7) 1,400 (7) 2,500 (6) 1,5

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

Theodore McMahon opened a law office on April 1, 2018. During the first month of operations, the business completed the following transactions:

Apr. 1 McMahon contributed \(70,000 cash to the business, Theodore McMahon, Attorney. The business issued common stock to McMahon.

3 Purchased office supplies, \)1,100, and furniture, \(1,300, on account.

4 Performed legal services for a client and received \)2,000 cash.

7 Purchased a building with a market value of \(150,000, and land with a market value of \)30,000. The business paid \(40,000 cash and signed a note payable to the bank for the remaining amount.

11 Prepared legal documents for a client on account, \)400.

15 Paid assistant鈥檚 semi monthly salary, \(1,200.

16 Paid for the office supplies purchased on April 3 on account. 18 Received \)2,700 cash for helping a client sell real estate.

19 Defended a client in court and billed the client for \(1,700.

25 Received a bill for utilities, \)650. The bill will be paid next month.

28 Received cash on account, \(1,100.

29 Paid \)3,600 cash for a 12-month insurance policy starting on May 1.

29 Paid assistant鈥檚 semi monthly salary, \(1,200.

30 Paid monthly rent expense, \)2,100.

30 Paid cash dividends of $3,200.

Requirements 4. Prepare the trial balance of Theodore McMahon, Attorney, at April 30, 2018.
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