Financial statements

Jose Loder established Bronco Consulting as a proprietorship on August $1,20$Y$1.$ The effect of each transaction and the balances after each transaction for August follow:

Assets $=$ Liabilities $+$ Owner's Equity

Item Cash $+$ Accounts Receivable $+$ Supplies $=$ Accounts Payable $+$ Jose Loder, Capital $-$ Jose Loder, Drawing $+$ Fees Earned $-$ Salaries Expense $-$ Rent Expense $-$ Auto Expense $-$ Supplies Expense $-$ Misc. Expense

a$.+75,000+75,000$

b$.+9,000+9,000$

Bal. $75,0009,0009,00075,000$

c$.+92,000+92,000$

Bal. $167,0009,0009,00075,00092,000$

d$.-27,000-27,000$

Bal. $140,0009,0009,00075,00092,000-27,000$

e$.-6,000-6,000$

Bal. $134,0009,0003,00075,00092,000-27,000$

f$.+33,000+33,000$

Bal. $134,00033,0009,0003,00075,000125,000-27,000$

g$.-23,000-15,500-7,500$

Bal. $111,00033,0009,0003,00075,000125,000-27,000-15,500-7,500$

h$.-58,000-58,000$

Bal. $53,00033,0009,0003,00075,000125,000-58,000-27,000-15,500-7,500$

i$.-6,100-6,100$

Bal. $53,00033,0002,9003,00075,000125,000-58,000-27,000-15,500-6,100-7,500$

j$.-5,000-5,000$

Bal. $48,00033,0002,9003,00075,000-5,000125,000-58,000-27,000-15,500-6,100-7,500$

Required:

Question Content Area

$1.$ Prepare an income statement for the month ended August $31,20$Y$1.$

Bronco Consulting

Income Statement

For the Month Ended August $31,20$Y$1$

Line Item Description Amount Amount

Fees earned

$Fees earned

$125,000$

Expenses:

Salaries expense

$Salaries expense

$58,000$

Rent expense

Rent expense

$27,000$

Auto expense

Auto expense

$15,500$

Supplies expense

Supplies expense

$6,100$

Miscellaneous expense

Miscellaneous expense

$7,500$

Total expenses Total expenses

$114,100$

Net income

$Net income

$10,900$

Feedback Area

Feedback

$1.$ An income statement reports the revenues and expenses. When revenues are larger than the expenses, the difference is net income.

Question Content Area

$2.$ Prepare a statement of owner's equity for the month ended August $31,20$Y$1.$ If an amount box does not require an entry, leave it blank. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign.

Bronco Consulting

Statement of Owner's Equity

For the Month Ended August $31,20$Y$1$

Line Item Description Amount

Jose Loder, capital, August $1,20$Y$1$

$Jose Loder, capital, August $1,20$Y$1$

$0$

Investment by owner

Investment by owner

$75,000$

Net income for August

Net income for August

$10,900$

Withdrawals

Withdrawals

$-5,000$

Jose Loder, capital, August $31,20$Y$1$

$Jose Loder, capital, August $31,20$Y$1$

$80,900$

Feedback Area

Feedback

$2.$ Begin with the capital balance at the beginning of the accounting period. Take into consideration additional investments by the owner, net income or net loss for the year, and any withdrawals. Total all amounts to determine the capital balance at the end of the accounting period.

Question Content Area

$3.$ Prepare a balance sheet as of August $31,20$Y$1.$ When entering assets, enter them in order of liquidity.

Bronco Consulting

Balance Sheet

August $31,20$Y$1$

Line Item Description Amount

Assets blank

Cash

$Cash

$48,000$

Accounts receivable

Accounts receivable

$33,000$

Supplies

Supplies

$2,900$

Total assets $Total assets

$83,900$

Liabilities

Accounts payable

$Accounts payable

$3,000$

Owner's Equity

Jose Loder, capital

Jose Loder, capital

$80,900$

Total liabilities and owner's equity $Total liabilities and owner's equity

$83,900$

Feedback Area

Feedback

$3.$ Recall that the balance sheet is a formal presentation of the accounting equation, such that total assets must equal total liabilities and owner's equity. Assets are items owned by the company, while liabilities are debts owed to creditors, and owner's equity represents the rights of the owner to the assets of the business.

Question Content Area

$4.$ Prepare a statement of cash flows for the month ending August $31,20$Y$1.$ If an amount box does not require an entry, leave it blank. Use the minus sign to indicate cash outflows, cash payments, and decreases in cash.

Bronco Consulting

Statement of Cash Flows

Fo