Jones Mower Repairs began operations on 1 August 2016 and completed the following transactions during the first
Question:
Jones’ Mower Repairs began operations on 1 August 2016 and completed the following transactions during the first month.
1. Darren Jones deposited $35 000 of his personal funds in a current account at a bank opened in the name of the business.
2. Mower repair equipment was purchased at a cost of $24 000, of which $14 000 was paid in cash. A loan payable was given for the remainder.
3. Darren collected $5000 from customers for repair services performed.
4. Shop rent was paid for the month of August, $1500.
5. Supplies amounting to $2100 were purchased on credit.
6. Wages of $1200 were paid as well as an account for electricity, $250.
7. Darren paid for the supplies purchased in (5) above.
8. Supplies used during August amounted to $750.
Required
A. Prepare a schedule. List the following assets, liabilities and equity as column headings: Cash at Bank; Supplies; Equipment; Loan Payable; Accounts Payable; D. Jones, Capital.
B. Show the effects of each of the transactions on the accounts listed. Indicate totals after each transaction and complete the schedule.
C. Prepare an income statement and a statement of changes in equity for the month ended 31 August 2016, and a balance sheet as at 31 August 2016.
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett