Question

From the following information, could you please help me workout an Income Statement, Statement of Owner's Equity, and Balance Sheet for the month of May of the current year.
Cash $12,000 Accounts Receivable 16,000 Supplies 350 Equipment 16,500 Notes Payable $13,000 Accounts Payable 12,000 S. Jones, Capital 18,000 S. Jones, Drawing 550 Service Revenue 6,000 Telephone Expense 350 Rent Expense 1,100 Advertising Expense 2,150 $49,000 $49,000

Answer 1

Answer:

Capital  $ 18,000

Retained Earnings  $ 1,850

TOTAL EQUITY  $ 19,850

First we need to work on the balance sheets, separating each part of it with the correspondent balance.

As you can see, to equilibrate the accounting equation Assets= Equity + Liabilities it's necessary to elaborate the income statement to complete the Retained Earnings of the month.

As you have the Income statement of the Month then the total amount that S. Jones take from the company must be deducted so we have the retained earnings that meets with the accounting equation.

Explanation:

BALANCE SHEETS May

Cash  $ 12,000

Accounts Receivable  $ 16,000

Office Supplies  $ 0,350

TOTAL CURRENT ASSETS  $ 28,350

Equipment  $ 16,500

TOTAL NONCURRENT ASSETS  $ 16,500

TOTAL ASSETS  $ 44,850

Accounts Payable  $ 12,000

Notes Payable  $ 13,000

TOTAL CURRENT LIABILITIES  $ 25,000

TOTAL NONCURRENT LIABILITIES  $ 0,000

TOTAL LIABILITIES  $ 25,000

Capital  $ 18,000

Retained Earnings  $ 1,850

TOTAL EQUITY  $ 19,850

Income Statement May

Service Revenue $ 6,000

Telephone Expense -$ 0,350

Rent Expense -$ 1,100

Advertising Expense -$ 2,150

Income $ 2,400

S. Jones, Drawing -$ 0,550

Retained Earnings $ 1,850