Use the facts in Exercise 1-9 to prepare a November statement of changes in equity for Extraordinary Studios, similar to Exhibit 1.9. Analysis Component: What activities caused equity to increase during the month of November 2020?

Exhibit 1.9

Exercise 1-9

On November 1, 2020, Jean Higgins started a wedding planning company, Extraordinary Studios. On November 30, 2020, the company?s records showed the following items. Use this information to prepare a November income statement for the business, similar to Exhibit 1.8.

Transcribed Image Text:

EXHIBIT 1.8 Income Statement for Organico Organico Income Statement For Month Ended March 31, 2020 Revenues: Food services revenue. $3,800 Teaching revenue. Total revenues. 300 $4,100 Operating expenses: Rent expense. Salarles expense. $1,000 700 Total operating expenses. 1,700 $2,400- Profit. EXHIBIT 1.9 Statement of Changes in Equity for Organico Organico Statement of Changes In Equity For Month Ended March 31, 2020 Halley Walker, capital, March 1. -0- $10,000 Investments by owner. Profit. 2,400 12,400 $12,400 Total Less: Withdrawals by owner Halley Walker, capiltal, March 31. 600 $11,800 EXHIBIT 1.10 Balance Sheet for Organico Organico Balance Sheet March 31, 2020 Assets Llabilitles $ 200 $8,400 Accounts payable. 3,600 Notes payable. Total labilities. Equity Halley Walker, capltal. $18.000 Total labilitiles and equity. Cash. Supplies. Equipment 6,000 $ 6,200 6,000 11,800 $18,000 Total assets EXHIBIT 1.11 Statement of Cash Flows for Organico Organico Statement of Cash Flows For Month Ended March 31, 2020 Cash flows from operating activitles $ 4,100 (3,400) (1,000) (700) Cash recelved from clients. Cash pald for supplies Cash pald for rent. Cash pald to employee Net cash used by operating activitles Cash flows from Investing activities. Cash flows from financing activitiles Investment by owner Withdrawal by owner $(1,000) -0- $10,000 (600) Net cash provided by financing activities. Net Increase In cash. 9,400 $8,400 Cash balance, March 1 -0- $8,400 Cash balance, March 31. The arrows ara provided for education purposes only to omphasize the link batwoen statements. %24 Owner's withdrawals. Wedding consulting revenue. Rent expense. Cash ............. Accounts receivable. Office supplies. $16,000 17,000 5,000 $ 3,360 22,000 2,550 Salaries expense. Automobiles. 36,000 6,000 Office equipment. Accounts payable. Owner's investments. 25,250 Telephone expense. 1,680 Utilities expenses. 7,500 660 84,000