Maria Gonzalez opened a veterinary business in Nashville, Tennessee, on August 1. On August 31, the balance sheet showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Office Equipment $6,000, Accounts Payable $3,600, and M. Gonzalez, Capital $13,700. During September the following transactions occurred.
1.Paid $2,900 cash on accounts payable.
2.Collected $1,300 of accounts receivable.
3.Purchased additional office equipment for $2,100, paying $800 in cash and the balance on account.
4.Earned revenue of $8,000 of which $2,500 is collected in cash and the balance is due in October.
5.Withdrew $1,000 in cash for personal use.
6.Paid salaries $1,700, rent for September $900, and advertising expenses $300.
7.Incurred utility expenses for month on account $170.
8.Received $10,000 from Capital Money Bank – money borrowed on a note payable.
Instructions
(a) Complete the table below. (If amount is a decrease, use either a negative sign preceding the number eg -45 or parentheses eg (45). For item 6. list amounts from largest to smallest eg 10, 5, 3, 2. If answer is zero, please enter 0. All blanks must be filled in. Note: Drawings and Expenses always decrease the account.)
MARIA GONZALEZ, VETERINARIAN
Maria Gonzalez Capital
Cash
+
Accounts
Receivable
+
Supplies
+
Office
Equipment
=
Notes
Payable
+
Accounts
Payable
+
M. Gonzalez
Capital
–
M. Gonzalez
Drawing
+
Revenues
–
Expenses
Bal.
1.
2.
3.
4.
5.
6.
7.
8.
(b) Complete the income statement for September, an owner’s equity statement for September, and a balance sheet at September 30. (List amounts from largest to smallest eg 10, 5, 3, 2. If a net loss, record amount using either a negative sign preceding the number eg -45 or parentheses eg (45). For the balance sheet, list assets in order of liquidity and liabilities from largest to smallest eg 10, 5, 3, 2.)
Maria Gonzalez, Veterinarian
Income Statement
For the Month Ended September 30, 2010September 30, 2010
Revenues
Accounts receivableRent expenseOffice equipmentSuppliesM.Gonzalez, CapitalNotes payableAdvertising expenseDrawingsAccounts payableCashService revenueSalaries expenseUtilities expense
$
Expenses
Office equipmentNotes payableSalaries expenseSuppliesAccounts payableService revenueRent expenseAdvertising expenseUtilities expenseDrawingsAccounts receivableCashM.Gonzalez, Capital
$
Advertising expenseSuppliesService revenueRent expenseNotes payableUtilities expenseM.Gonzalez, CapitalAccounts payableOffice equipmentSalaries expenseDrawingsCashAccounts receivable
Office equipmentAccounts receivableService revenueSuppliesNotes payableAccounts payableDrawingsSalaries expenseUtilities expenseAdvertising expenseM.Gonzalez, CapitalCashRent expense
Rent expenseService revenueAccounts receivableSalaries expenseSuppliesOffice equipmentM.Gonzalez, CapitalDrawingsAccounts payableUtilities expenseCashNotes payableAdvertising expense
Total expenses
Net income (loss)
$
Maria Gonzalez, Veterinarian
Owner’s Equity Statement
September 30, 2010For the Month Ended September 30, 2010
Salaries expenseRent expenseNet incomeDrawingsUtilities expenseM.Gonzalez, Capital, September 30SuppliesCashOffice equipmentAccounts receivableNotes payableAccounts payableM.Gonzalez, Capital, September 1Advertising expenseService revenue
$
Add: M.Gonzalez, Capital, September 30Utilities expenseCashAccounts receivableOffice equipmentNotes payableAdvertising expenseSalaries expenseSuppliesAccounts payableNet incomeM.Gonzalez, Capital, September 1DrawingsRent expenseService revenue
Less: Advertising expenseAccounts receivableService revenueSuppliesRent expenseSalaries expenseDrawingsOffice equipmentM.Gonzalez, Capital, September 30Net incomeM.Gonzalez, Capital, September 1CashNotes payableAccounts payableUtilities expense
Notes payableDrawingsAccounts receivableNet incomeUtilities expenseService revenueAccounts payableM.Gonzalez, Capital, September 1Rent expenseSalaries expenseOffice equipmentAdvertising expenseM.Gonzalez, Capital, September 30CashSupplies
$
Maria Gonzalez, Veterinarian
Balance Sheet
For the Month Ended September 30, 2010September 30, 2010
Assets
Service revenueAccounts receivableAccounts payableSuppliesM.Gonzalez, CapitalAdvertising expenseUtilities expenseDrawingsCashSalaries expenseOffice equipmentNotes payableRent expense
$
Salaries expenseNotes payableRent expenseAccounts payableM.Gonzalez, CapitalService revenueAccounts receivableUtilities expenseAdvertising expenseDrawingsCashSuppliesOffice equipment
Salaries expenseDrawingsCashM.Gonzalez, CapitalSuppliesAccounts payableService revenueUtilities expenseRent expenseOffice equipmentAdvertising expenseNotes payableAccounts receivable
Service revenueSalaries expenseAdvertising expenseCashRent expenseDrawingsUtilities expenseM.Gonzalez, CapitalOffice equipmentSuppliesAccounts payableNotes payableAccounts receivable
Total assets
$
Liabilities and Owner’s Equity
Liabilities
Advertising expenseService revenueSalaries expenseUtilities expenseRent expenseDrawingsM.Gonzalez, CapitalNotes payableAccounts payableSuppliesOffice equipmentAccounts receivableCash
$
Service revenueSuppliesNotes payableAccounts receivableAdvertising expenseM.Gonzalez, CapitalCashRent expenseSalaries expenseOffice equipmentUtilities expenseDrawingsAccounts payable
Total Liabilities
Owner’s equity
Advertising expenseSuppliesCashService revenueAccounts receivableSalaries expenseNotes payableRent expenseAccounts payableDrawingsOffice equipmentUtilities expenseM.Gonzalez, Capital
Total liabilities and owner’s equity
$