Problem 2-T-Accounts for a Service Firm (File TACCOUNTS) Learning Objectives Analyze common business transactions for a sole proprietorship service firm and enter them into t-accounts. Determine the proper balance of the t account. Prepare a trial balance using the t-accounts. Analyze the results of the business and comment on some common ratios. Prepare a set of financial statements for a sole proprietorship who is engaged in a service oriented business. Create a Chart Problem Data Analyze each transaction below. TRANSACTIONS - The following transactions happened during January, the first month of a brand new business. 1. On the first day of January, the owner, Ms. Sheila Mane, invested $50,000 cash in the name of the business. - The Mane Event. This company performs cosmetology services for a client base. 2. Prepaid the rent for the next three months in the amount of $6,000. 3. Purchased office supplies for $3,000 in cash. 4. Purchased Equipment $20,000 for the Salon paying $5,000 down and the remainder on account.. 5. Collected fee income - cash-of $26,000 for the first part of the month. 6. Paid the current month's utilities expense of $2,500. 7. Had a bridal party in for up do's and nail services. Billed the bride's mother for services totaling $3,000 to be paid next month. 8. Paid employee's wages of $4,600. 9. Paid telephone bill of $580. 10. Purchased more supplies of $1,100 on account. 11. Paid $25.00 to the Donut Nut to provide refreshments to the employees to celebrate the first successful month of business. 12. Collected $1,000 from the bride's mother who was previously billed. 13. Clients paid a total of $9,100 cash in fees for the second half of the month. 14. The owner (Sheila Mane) took a cash withdrawal of $6,500. Requirements: 1. Open the file called Taccounts. Record each transaction in the appropriate t account. Also list the transaction number. The first transaction has been completed for you as an example. The totals of the asset t-accounts should automatically update. (Note: Not all accounts are necessarily used.) 2. Review the formulas in the asset t-accounts that were used to foot the t-accounts. (i.e. review cells B17 and B26. Complete the footing process for all the other t accounts using the assets as the model. (You should know what the normal balance of each type of account is.) 3. Once you have recorded the transactions in the t-accounts, and have made sure that you have footed or totaled all of your t-accounts, check the accuracy of the transactions by preparing a trial balance. (A trial balance is a listing of all accounts and their respective account balances. The purpose of a trial balance is to insure that the total debits equal the total credits.) To prepare the trial balance, use the cell reference of the account name, and then enter the account balance from the appropriate cell on the spreadsheet. Review the trial balance. The asset accounts have been set up and cell- referenced for you to provide an example of how to set up the trial balance accounts. Finish preparing the trial balance. Save your work at TACCOUNTS3. Check figure: The total debits are $104,200. Print out the entire template. Print to fit to one page wide. Also print the formulas using Control Create a new "tab" or worksheet called "Answers" and prepare answers to the following questions. Make sure you answer all parts and use appropriate spelling and grammar. Label all parts of computations. Make sure all of your answers will fit on one or two pages. 4. How much cash did the business spend during the month? 5. What is the current ratio of the business? 6. Interpret the results of #5. What does the current ratio tell us and what does that mean for this business? 7. Would the company's profit have been affected if the owner did NOT take a withdrawal at the end of the month? (Why or why not? Explain. 8. What would the current ratio have been if the owner did not take any withdrawal during the month? Show your calculation and describe why the result is different: 9. Create a new tab or worksheet within the same file. Name the new tab "Financials." Prepare a set of financial statements on in this new tab or worksheet using the information from your trial balance. You should prepare IN PROPER FORMAT an Income Statement, a Statement of Owner's Equity and a balance sheet. Once again, you should input only CELL REFERENCES in the amounts column. (That means if a transaction changes or is added, everything else on the financial statements will automatically update.) Save the file as TACCOUNTS9. Make sure the financial statements print out neatly. (They should break in appropriate places. - DO NOT BREAK A FINANCIAL STATEMENT - They do NOT need to fit on one page.) Also I will be viewing the formulas using Control ~ 10. Create a new tab or worksheet within the same file. Name the new tab "Formulas TB. Copy the Trial balance into this new tab. Use Control Tilde to show the formulas. Re- save your work. Also create another new tab or worksheet within the same file and name it Formulas Financials. Copy the financials into this new tab. Use Control Tilde to show the formulas. Re-save your work. fernunha Pele femme Iraur Cuner Op 50,000 Goran ACOMM OM DIE UTH Excense Formula Bar Supplies Wapes Epense hunts Talance Jun 30, 2017 Dobles 5,000 Account Cred: Accounts recei Purales Prepaid insurance Full PER Tempere TER Formula 1 Faru Mare locas Eupent Problem 2-T-Accounts for a Service Firm (File TACCOUNTS) Learning Objectives Analyze common business transactions for a sole proprietorship service firm and enter them into t-accounts. Determine the proper balance of the t account. Prepare a trial balance using the t-accounts. Analyze the results of the business and comment on some common ratios. Prepare a set of financial statements for a sole proprietorship who is engaged in a service oriented business. Create a Chart Problem Data Analyze each transaction below. TRANSACTIONS - The following transactions happened during January, the first month of a brand new business. 1. On the first day of January, the owner, Ms. Sheila Mane, invested $50,000 cash in the name of the business. - The Mane Event. This company performs cosmetology services for a client base. 2. Prepaid the rent for the next three months in the amount of $6,000. 3. Purchased office supplies for $3,000 in cash. 4. Purchased Equipment $20,000 for the Salon paying $5,000 down and the remainder on account.. 5. Collected fee income - cash-of $26,000 for the first part of the month. 6. Paid the current month's utilities expense of $2,500. 7. Had a bridal party in for up do's and nail services. Billed the bride's mother for services totaling $3,000 to be paid next month. 8. Paid employee's wages of $4,600. 9. Paid telephone bill of $580. 10. Purchased more supplies of $1,100 on account. 11. Paid $25.00 to the Donut Nut to provide refreshments to the employees to celebrate the first successful month of business. 12. Collected $1,000 from the bride's mother who was previously billed. 13. Clients paid a total of $9,100 cash in fees for the second half of the month. 14. The owner (Sheila Mane) took a cash withdrawal of $6,500. Requirements: 1. Open the file called Taccounts. Record each transaction in the appropriate t account. Also list the transaction number. The first transaction has been completed for you as an example. The totals of the asset t-accounts should automatically update. (Note: Not all accounts are necessarily used.) 2. Review the formulas in the asset t-accounts that were used to foot the t-accounts. (i.e. review cells B17 and B26. Complete the footing process for all the other t accounts using the assets as the model. (You should know what the normal balance of each type of account is.) 3. Once you have recorded the transactions in the t-accounts, and have made sure that you have footed or totaled all of your t-accounts, check the accuracy of the transactions by preparing a trial balance. (A trial balance is a listing of all accounts and their respective account balances. The purpose of a trial balance is to insure that the total debits equal the total credits.) To prepare the trial balance, use the cell reference of the account name, and then enter the account balance from the appropriate cell on the spreadsheet. Review the trial balance. The asset accounts have been set up and cell- referenced for you to provide an example of how to set up the trial balance accounts. Finish preparing the trial balance. Save your work at TACCOUNTS3. Check figure: The total debits are $104,200. Print out the entire template. Print to fit to one page wide. Also print the formulas using Control Create a new "tab" or worksheet called "Answers" and prepare answers to the following questions. Make sure you answer all parts and use appropriate spelling and grammar. Label all parts of computations. Make sure all of your answers will fit on one or two pages. 4. How much cash did the business spend during the month? 5. What is the current ratio of the business? 6. Interpret the results of #5. What does the current ratio tell us and what does that mean for this business? 7. Would the company's profit have been affected if the owner did NOT take a withdrawal at the end of the month? (Why or why not? Explain. 8. What would the current ratio have been if the owner did not take any withdrawal during the month? Show your calculation and describe why the result is different: 9. Create a new tab or worksheet within the same file. Name the new tab "Financials." Prepare a set of financial statements on in this new tab or worksheet using the information from your trial balance. You should prepare IN PROPER FORMAT an Income Statement, a Statement of Owner's Equity and a balance sheet. Once again, you should input only CELL REFERENCES in the amounts column. (That means if a transaction changes or is added, everything else on the financial statements will automatically update.) Save the file as TACCOUNTS9. Make sure the financial statements print out neatly. (They should break in appropriate places. - DO NOT BREAK A FINANCIAL STATEMENT - They do NOT need to fit on one page.) Also I will be viewing the formulas using Control ~ 10. Create a new tab or worksheet within the same file. Name the new tab "Formulas TB. Copy the Trial balance into this new tab. Use Control Tilde to show the formulas. Re- save your work. Also create another new tab or worksheet within the same file and name it Formulas Financials. Copy the financials into this new tab. Use Control Tilde to show the formulas. Re-save your work. fernunha Pele femme Iraur Cuner Op 50,000 Goran ACOMM OM DIE UTH Excense Formula Bar Supplies Wapes Epense hunts Talance Jun 30, 2017 Dobles 5,000 Account Cred: Accounts recei Purales Prepaid insurance Full PER Tempere TER Formula 1 Faru Mare locas Eupent