LEARNING OBJECTIVES Show how financial position is affected by transactions. Prepare three basic proprietorship financial statements. Back-solve for cash balances. Alter the worksheet to accommodate additional transactions. Create a chart showing liability and equity categories. Note: For a problem using the corporate form of business organization, download FTRANS from the website for this book found at cengagebrain.com. PROBLEM DATA On June 1 of the current year, Wilson Wood opened Woody's Web Services. This sole proprietorship had the following transactions during June. a. Opened a business checking account and made a deposit, $9,000. b. Paid rent for June for office space and computer equipment, $3,000. C. Purchased office supplies (stamps, pens, etc.) on account, $1,980. d. Received cash for services rendered, $4,500. e. Paid creditor for office supplies purchased on account, $1,400. f. Purchased office supplies for cash, $420. g. Billed clients for consultations performed on account, $4,600. h. Paid monthly internet service bill of $360. i. Paid the secretary's salary of $2,400. 1. Returned $300 of office supplies purchased in transaction f. Received a full refund. k. Received cash from clients previously billed, $3,000. 1. Cash was withdrawn for owner's personal use, $2,000. REQUIREMENT 1. Review the printout of the worksheet PTRANS. You have been asked to complete the worksheet by recording these transactions. 2. Open the file PTRANS from the website for this book at cengagebrain.com. Enter the formulas in the appropriate cells on the worksheet. Then enter the increases and decreases resulting from each transaction on the worksheet. For example, the first transaction increases the cash account by $9,000 and also increases the capital account by $9,000 This transaction has already been recorded on the worksheet. The worksheet will automatically total each column as values are entered in that column. Enter negative numbers with a minus sign (-). When you are finished, check row 26 to make sure that total assets equal total liabilities and equity. PTRANS Business Transactions + Assets Accounts Receivable $0 Liabilities Accounts Payable $0 Office Supplies $0 Equity Wood Capital $9,000 Cash $9,000 a) b) c) d) e) f) g) h) Running Cash Balance $9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 1) 1) k) 1) m) $9,000 $0 $0 $0 $9,000 Balance Verification Total assets Total liabilities and equity Difference $9,000 9,000 $0