Financial balances for the car hire business of John’s Limos on 31 March 2016 are provided below in a table in accounting equation form similar to the chapter illustrations.

During April, the business of John’s Limos entered into the following transactions.
1. Collected $8000 of the accounts receivable.
2. Paid $2000 of the accounts payable.
3. Purchased another vehicle for $48 000. Paid $5000 in cash and signed a loan agreement for the balance.
4. Billed customers for services performed, $10 500.
5. Fuel supplies purchased on credit, $3750.
6. Paid expenses in cash, $4250 (wages, $2400; car cleaning $1200; advertising, $650).
7. John Limos withdrew $2000 for personal use.
8. Paid parking fines of $300.

Required
A. List the 31 March balances for assets, liabilities and equity in table form as shown above.
B. Record the effects of each transaction. Show the total of each column after recording each transaction.
C. Prepare an income statement, a statement of changes in equity and a statement of cash flows for the month ended 30 April 2016, and a balance sheet (account format) as at 30 April 2016.

Transcribed Image Text:

Assets Office Cash at Accounts Bank + Receivable + Equipment $11000 + $15 000 + = $1500 + $94 000 + 0 Liabilities + Motor Fuel Accounts Loan + Vehicles + Supplies = Payable + Payable + $3 500 + $12000 + Equity John Limos, Capital $106 000