George Littlechild started a new kitchen and bath design business called Littlechild Enterprises. The following activities occurred during its first month of operations, March 2020: a. Littlechild invested $215,000 cash and office equipment valued at $31,000 in the business. b. Purchased a small building for $710,000 to be used as an office. Paid $155,000 in cash and signed a note payable promising to pay the balance over several years. c. Purchased $4,100 of office supplies for cash. d. Purchased $83,000 of office equipment on credit. e. Littlechild made reservations at a hotel hosting a kitchen and bath design conference in August 2020. He will send a $2,100 deposit on July 1, 2020. f. Completed a project on credit and billed the client $6,300 for the work. g. Paid a local online newspaper $4,600 for an announcement that the office had opened. h. Completed a project for a client and collected $5,100 cash. i. Made a $5,100 payment on the equipment purchased in (d). j. Received $3,050 from the client described in (f). k. Paid $9,200 cash for the office secretary's wages. I. Littlechild withdrew $4,700 cash from the company bank account to pay personal living expenses. Required: 1. & 2. Complete the following table. Use additions and subtractions to show the transactions' effects on the elements of the equation. For each change in equity, select whether the change was caused by an investment, a revenue, an expense, or a withdrawal. Determine the final total for each item and verify that the equation is in balance. (Enter all amounts as positive values. If the transactionlevent does not affect equity or do not require a iournal entry select "No Affect on Fauity" in the 'Fynlanation of equity 1. & 2. Complete the following table. Use additions and subtractions to show the transactions' effects on the elements of the equation. For each change in equity, select whether the change was caused by an investment, a revenue, an expense, or a withdrawal. Determine the final total for each item and verify that the equation is in balance. (Enter all amounts as positive values. If the transaction/event does not affect equity or do not require a journal entry, select "No Affect on Equity" in the 'Explanation of equity transaction' field.) Assets Liabilities + Equity Cash + Accounts Receivable Office Supplies + Office Equipment Building Accounts Payable Notes Payable + Littlechil Capital (a) (b) (C) (d) (e) (f) (g) (h) (i) () |(k) (1) 3-a. Prepare an income statement. Littlechild Enterprises Income Statement For Month Ended March 31, 2020 Revenues: Service revenue Operating expenses: Wages expense Advertising expense Total operating expenses 0 3-b. Prepare a statement of changes in equity. Littlechild Enterprises Statement of Changes in Equity For Month Ended March 31, 2020 George Littlechild, capital, March 1 Add: Investments by owner Total $ 0 Less: Withdrawals by owner Loss 0 George Littlechild, capital, March 31 3-b. Prepare a statement of changes in equity. Littlechild Enterprises Statement of Changes in Equity For Month Ended March 31, 2020 George Littlechild, capital, March 1 Add: Investments by owner Total $ 0 Less: Withdrawals by owner Loss 0 George Littlechild, capital, March 31 3-c. Prepare a balance sheet. Littlechild Enterprises Balance Sheet March 31, 2020 Assets Liabilities Cash Accounts receivable $ 0 Office supplies Office equipment Building Total assets Accounts payable Notes payable Total liabilities Equity George Littlechild, capital 0 Total liabilities and equity $ $ 0 Analysis Component: Littlechild Enterprises' assets are financed 73% by debt. What does this mean? As part of your answer, include an explan the 73% was calculated. (Round your answer to the nearest whole number.) Assets result from a combination of debt and equity financing (A = L + E). Littlechild Enterprises' total assets of resulted from incurring in liabilities. x 100 = 73 %
