Frank Petronick decided to start an accounting practice after graduation from university. The following is a list of events that occurred concerning Frank’s practice during June 2021, the first month of operations.

June 1 After shopping around, Frank found an office to lease and signed a lease agreement. The lease calls for a payment of $1,050 rent per month.

4 Borrowed $3,846 from his grandmother so that he could buy some office furniture for his new office.
4 Deposited the $3,846 plus $530 of his own cash in a new bank account at BMO under the name Petronick Accounting Services.
6 Paid the landlord the first month’s rent.
8 Purchased furniture for $3,160 on account.
11 Moved into the office and obtained the first assignment from a client to prepare year-end financial statements for $1,865.
15 Performed the work on the assignment and sent an invoice to the customer for $1,865.
15 Paid half of the amount of the purchase of furniture.
18 Purchased supplies on account for $344.
26 Paid for Internet services, $49 cash.
28 Collected $900 of the June 15 billing to the customer.
30 Withdrew cash from the business of $128 for personal expenses.

Instructions

a. Prepare a tabular analysis of the eff ects of the above transactions on the accounting equation.

b. From an analysis of the owner’s equity, calculate the account balance in F. Petronick, Capital, at June 30.

Taking It Further

Assume on June 30 there is $144 of supplies on hand and that $200 of supplies had been used during June. What amount should be reported as an asset, Supplies, on the June 30 balance sheet? What amount should be reported as Supplies Expense?