On October 1, 2020, Mary Graham organized a computer service company called Echo Systems. Echo is organized

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On October 1, 2020, Mary Graham organized a computer service company called Echo Systems. Echo is organized as a sole proprietorship and will provide consulting services, computer system installations, and custom program development. Graham has adopted the calendar year for reporting, and expects to prepare the company?s first set of financial statements as of December 31, 2020. The initial chart of accounts for the accounting system includes these items:

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Part A:

Required

1. Set up balance column accounts based on the chart of accounts provided.

2. Prepare journal entries to record each of the following October transactions.

3. Post the October entries.

4. Prepare a trial balance at October 31, 2020.

5. Prepare an income statement and a statement of changes in equity for the month ended October 31, 2020, as well as a balance sheet at October 31, 2020.

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Part B:

Required

6. Prepare journal entries to record each of the following November transactions.

7. Post the November entries.

8. Prepare a trial balance at November 30, 2020.

9. Prepare an income statement and a statement of changes in equity for the two months ended November 30, 2020, as well as a balance sheet at November 30, 2020.

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Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Fundamental Accounting Principles Volume I

ISBN: 978-1260305821

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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