Question

At the beginning of September, Selena Cantu started Cantu Wealth Management Consulting, a firm that offers financial planning and advice about investing and managing money. On September 30, the accounting records of the business showed the following information.
Cash $66,200
Accounts Receivable 8,000
Office Supplies 6,800
Office Equipment 75,000
Accounts Payable 11,400
Selena Cantu, Capital, September 1, 2019 53,400
Fees Income 155,800
Advertising Expense 13,000
Salaries Expense 32,000
Telephone Expense 1,600
Withdrawals 18,000
Required:
Prepare a statement of owner’s equity for the month of September and a balance sheet for Cantu Wealth Management Consulting as of September 30, 2019.

Answer 1

Answer:

A.$144,600

B. ASSETS $156,000

LIABILITIES $156,000

Explanation:

A. Preparation of a statement of owner’s equity for the month of September and a balance sheet for Cantu Wealth Management Consulting as of September 30, 2019

First step is to prepare the Income statement

INCOME STATEMENT

For the month of September, 2019

Fees income $155,800

Less: Expense

Advertising Expense ($13,000)

Salaries Expense ($32,000)

Telephone Expense ($1,600)

Net income $109,200

Now let prepare the Statement of owner's equity

STATEMENT OF OWNER'S EQUTIY

For the month of September, 2019

Selena Cantu, Capital, September 1,2019 $53,400

Add: net income $109,200

Less: Withdrawals $18,000

Selena Cantu, Capital, September 30, 2019 $144,600

Therefore the statement of owner’s equity for the month of September will be $144,600

B. Preparation of the balance sheet for Cantu Wealth Management Consulting as of September 30, 2019

BALANCE SHEET For the month ended

September 30, 2019

ASSETS:

Cash $66,200

Accounts receivable $8,000

Office Supplies $6,800

Office equipment $75,000

TOTAL ASSETS $156,000

($66,200+$8,000+$6,800+$75,000)

Liabilities and Owner's capital

LIABILITIES:

Accounts payable $11,400

Owner's capital:

Selena Cantu, Capital, September 30, 2019 $144,600

TOTAL LIABILITIES and OWNER'S CAPITAL $156,000

($11,400+$144,600)

Therefore the balance sheet for Cantu Wealth Management Consulting as of September 30, 2019 will be:

ASSETS $156,000

LIABILITIES $156,000