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48 PART 1 Accounting for a Service Business MASTERY PROBLEM Cash following (p): $3, 105 Revenue following (p): $2,100 Lisa Vozniak started her own business, We Do Windows. She offers interior and exte- rior window cleaning for local area residents. Lisa rents a garage to store her tools and cleaning supplies and has a part-time assistant to answer the phone and handle third-story work. (Lisa is afraid of heights.) The transactions for the month of July are as follows: (a) Lisa invested cash by making a deposit in a bank account for the business, $8,000. (b) Paid rent for July, $150. (c) Purchased a used van for cash, $5,000. (d) Purchased tools on account from Clean Tools, $600. (e) Purchased cleaning supplies that cost $300. Paid $200 cash and will pay the bal- ance next month, $100. (f) Paid part-time assistant (wages) for first half of month, $100. (g) Paid for advertising, $75. (h) Paid two-year premium for liability insurance on van, $480. (i) Received cash from clients for services performed, $800. (j) Performed cleaning services for clients on account, $500. (k) Paid phone bill, $40. (1) Received cash from clients for window cleaning performed on account in transac- tion (j), $200. (m) Paid part-time assistant (wages) for last half of month, $150. (n) Made partial payment on tools purchased in transaction (d), $200. (o) Earned additional revenues amounting to $800: $600 in cash and $200 on account. (p) Vozniak withdrew cash at the end of the month for personal expenses, $100. REQUIRED 1. Enter the above transactions in an accounting equation similar to the one illustrated below. Assets Liabilities (Items Owned) Owner's Equity (Amounts Owed) Owner's Investment) + (Earnings) Accounts Cash + Receivable + Supplies + In Prepaid ce + Tools + Van Accounts Lisa Lisa Insurance Payable Vozniak, - Vozniak, + Revenues - Expenses Description Capital Drawing 2. After transaction (p), compute the balance of each account. 3. Prepare an income statement for We Do Windows for the month of July 20-. 4. Prepare a statement of owner's equity for We Do Windows for the month of July 20--. This problem challenges 5. Prepare a balance sheet for We Do Windows as of July 31, 20--. you to apply your