Principles of Accounting 1

Chapter 1 Problem 2 Homework

LeBron James established Get Skills Services on June 1, 2015. Get Skills Services offers basketball training camps to its clients. The effect of each transaction and the balances after each transaction for June are shown below.

	Cash	+Accounts Receivable		+Supplies	+Building	+Accounts Payable	+Capital Stock	-Dividends	+Fees Earned	-Supplies Expense	-Rent Expense	-Misc. Expense
A.	+120,000						+120,000
Bal.	120,000						120,000
B.			+14,000			+14,000
Bal	120,000		14,000			14,000	120,000
C.	-100,000				+100,000
Bal	20,000		14,000		100,000	14,000	120,000
D.		+45,000							+45,000
Bal	20,000	45,000	14,000		100,000	14,000	120,000		45,000
E.	-10,000										-10,000
Bal	10,000	45,000	14,000		100,000	14,000	120,000		45,000		-10,000
F.	-3,000											-3,000
Bal	7,000	45,000	14,000		100,000	14,000	120,000		45,000		-10,000	-3,000
G.	+40,000	-40,000
Bal	47,000	5,000	14,000		100,000	14,000	120,000		45,000		-10,000	-3,000
H.	-12,000					-12,000
Bal	35,000	5,000	14,000		100,000	2,000	120,000		45,000		-10,000	-3,000
I.			-8,000							-8,000
Bal	35,000	5,000	6,000		100,000	2,000	120,000		45,000	-8,000	-10,000	-3,000
J.	+65,000								+65,000
Bal	100,000	5,000	6,000		100,000	2,000	120,000		110,000	-8,000	-10,000	-3,000
K.	-7,500							-7,500
Bal	92,500	5,000	6,000		100,000	2,000	120,000	-7,500	110,000	-8,000	-10,000	-3,000

Instructions

1. Prepare an income statement for the month ended June 30, 2015.

2. Prepare a retained earnings statement for the month ended June 30, 2015.

3. Prepare a balance sheet as of June 30, 2015.

Principles of Accounting 1

Chapter 1 Problem 1 Homework

On April 1 of the current year, Bret Michaels established a business to manage recording artists. He completed the following transactions during March:

a. Opened a business bank account with a deposit of $40,000 in exchange for capital stock.

b. Paid rent expense for the month, $1,900.

c. Purchased office supplies using cash, $4,000.

d. Received cash from sales commissions earned for managing recording artists, $8,000.

e. Purchased office equipment on account, $5,000.

f. Billed customers for sales commission earned, $15,500.

g. Paid office salaries, $7,200.

h. Determined that the cost of supplies on hand was $1,600; therefore, the cost of supplies used was $2,400.

i. Paid creditors on account, $4,000.

j. Received $10,000 cash from customers on account.

k. Paid dividends, $1,700.

Instructions

1. Create an excel spreadsheet as demonstrated in the example problem. Be sure to use the appropriate account titles and place them in the proper order.

Hint: (Assets-Cash, Accounts Receivable, Supplies, Office Equipment; Liabilities-Accounts Payable; Stockholders Equity-Capital Stock, Dividends, Sales Commissions or Fees Earned, Rent Expense, Salaries Expense, Supplies Expense)

2. Calculate the amount of net income for March.

3. Calculate the net change in Retained Earnings for the month of April.