Brenda Jo Smith is an architect who operates her own business. The accounts and transactions for the business follow.
INSTRUCTIONS
(1) Analyze the transactions for January 2019. Record each in the appropriate T accounts. Use plus and minus signs in front of the amounts to show the increases and decreases. Identify each entry in the T account by writing the letter of the transaction next to the entry. (2) Determine the account balances. Prepare a trial balance, an income statement, a statement of owner's equity, and a balance sheet.
ASSETS
Cash
Accounts Receivable
Office Furniture
Office Equipment
LIABILITIES
Accounts Payable
OWNER'S EQUITY
Brenda Jo Smith, Capital
Brenda Jo Smith, Drawing
REVENUE
Fees Income
EXPENSES
Advertising Expense
Utilities Expense
Salaries Expense
Telephone Expense
Miscellaneous Expense
TRANSACTIONS
a. Brenda Jo Smith invested $20,000 in cash to start the business.
b. Paid $2,000 for advertisements in a design magazine.
c. Purchased office furniture for $2,300 in cash.
d. Performed services for $4,550 in cash.
e. Paid $210 for the monthly telephone bill.
f. Performed services for $1,560 on credit.
g. Purchased a fax machine for $325; paid $75 in cash with the balance due in 30 days.
h. Paid a bill for $550 from the office cleaning service.
i. Received $2,130 from clients on account.
j. Purchased additional office chairs for $545; received credit terms of 30 days.
k. Paid $4,000 for salaries.
l. Issued a check for $225 in partial payment of the amount owed for office chairs.
m. Received $2,300 in cash for services performed.
n. Issued a check for $460 for utilities expense.
o. Performed services for $2,150 on credit.
p. Collected $900 from clients on account.
q. Brenda Jo Smith withdrew $2,500 in cash for personal expenses.
r. Paid $600 to Copy Quick for photocopy work performed during the month.
Analyze: Using the basic accounting equation, what is the financial condition of Brenda Jo Smith's business at month-end?