Financial balances for Ho Ming Wee, IT Consultancy, on 30 June 2024 are given below in a table in accounting equation form similar to the chapter illustrations.

During the early part of July, the business entered into the following transactions.
1.    Paid \($3260\) on accounts payable.
2.    Collected \($4600\) of the monies owed by clients.
3.    Purchased IT equipment for \($11\) 200. Paid \($1200\) in cash and signed a loan agreement for the balance.
4.    Billed customers for IT services performed, \($9820.
5.\)    Purchased supplies on credit, \($2100.
6.\)    Paid expenses in cash, \($9400\) (advertising, \($2000;\) rent, \($6000;\) wages, \($1400).
7.\)    Used \($600\) of supplies during the period.
8.    Collected \($9650\) of accounts receivable.
9.    Ho Ming Wee paid for a \($21\) 000 family holiday to Europe using the firm’s bank account.
Required

(a) List the 30 June balances for assets, liabilities and equity in table form.

(b) Record the effects of each transaction. Show the total of each column after recording each transaction as illustrated in the text.

(c) Prepare a statement of financial performance and a statement of changes in equity for the month and a statement of financial position in narrative format as at 31 July 2024.

(d) Discuss if these financial statements are useful for the owner/manager of the business.

Transcribed Image Text:

Assets = Liabilities + Equity Cash at bank + Accounts receivable + Office + IT equipment = Accounts payable + Loan payable + Ho Ming supplies Wee, capital $9 000 + $14 250 + $2.000 + $20 875 = $3 425 + $9 750 + $32 950