Jerry Ford practiced law with a partnership for five years. Recently he opened his own law office, which he operates as a proprietorship. The name of the new entity is Jerry Ford, Attorney. Ford experienced the following events during the organizing phase of his new business and its first month of operations. Some of the events were personal and did not affect his law practice. Others were business transactions and should be accounted for by the business.

Required

1. Analyze the effects of the events on the accounting equation of the proprietorship of Jerry Ford, Attorney. Use a format similar to Exhibit 1-7 on page 19.

2. At February 28, compute:

a. Total assets c. Total owners equity

b. Total liabilities d. Net income or net loss for February

Feb 4 Received $100,000 cash from former law partners 5 Deposited 580,000 cash in a new business bank account titled Jerry Ford, Attomey Paid 300 cash for Betterhead stationery for the new law office. 7 Purchased office furniture for the law office. Ford agreed to pay the account payable, 57,006, within 3 months 10 Sold 500 shares of Intel stock, which he had owned for several years, meceiving $75,000 cash 11 Deposited the $75,000 cash from sale of the Intel stock in his personal bank account 12 A representative of a large company telephoned Ford and told him of the company's intention to transfer its legal business to Jerry Ford, Attomey 18 Finished court hearing on behalf of a client and submitted a bill for legal services, 55.000. Ford expected to collect from this client within two weeks 25 Paid office rent, $1,000 28 Withdrew 510.000 cash from the business for personal use