PR 1-4B Transactions; financial statements
On June 1, 2012, Lindsey Brown established Equity Realty. Lindsey completed the following transactions during the month of June:
a. Opened a business bank account with a deposit of $15,000 from personal funds.
b. Paid rent on office and equipment for the month, $4,000.
c. Paid automobile expenses (including rental charge) for month, $1,200, and miscellaneous expenses, $800.
d. Purchased supplies (pens, file folders, and copy paper) on account, $1,000.
e. Earned sales commissions, receiving cash, $18,500.
f. Paid creditor on account, $600.
g. Paid office salaries, $2,500.
h. Withdrew cash for personal use, $5,000.
i. Determined that the cost of supplies on hand was $300; therefore, the cost of supplies used was $700.
Instructions
1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
|
Assets |
= Liabilities + |
Owner’s Equity |
|||||||
|
Lindsey |
Lindsey |
Office |
|||||||
|
Accounts |
Brown, |
Brown, |
Sales |
Rent |
Salaries |
Auto |
Supplies |
||
|
Cash + Supplies |
Payable |
+ Capital |
– Drawing |
Commissions |
– Expense |
– Expense |
– Expense |
– Expense |
– Expense |
2. Prepare an income statement for June, a statement of owner’s equity for June, and a balance sheet as of June 30.