Pr1-1,Pr1-2a

627 Words Dec 30th, 2012 3 Pages
PR1-1A
On September 1 of the current year, Maria Edsll established a business to manage rental property. She completed the following transactions during September:
a. Opened a business bank account with a deposit of $40,000 from personal funds.
b. Purchased supplies (pens, file folders, and copy paper) on account, $2,200.
c. Received cash from fees earned for managing rental property, $6,000.
d. Paid rent on office and equipment for the month, $2,700.
e. Paid creditors on account, $1,000.
f. Billed customers for fees earned for managing rental property, $5,000.
g. Paid automobile expenses (including rental charges) for month, $600, and miscellaneous expenses, $300.
h. Paid office salaries, $1,900.
i. Determined that the cost of
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Owner’s equity is the right of owners to the assets of the business. These rights are increased by owner’s investments and revenues and decreased by owner’s withdrawals and expenses.

3. $4,600 ($11,000 – $2,700 – $1,900 – $900 – $600 – $300)

4. September’s transactions increased Maria Edsall’s capital by $2,800 ($4,600 – $1,800), which is the excess of September’s net income of $4,600 over Maria Edsall’s withdrawals of $1,800.

PR 1-2A
1. Prepare a income statement for the current year ended December 31

NEW WORLD TRAVEL AGENCY Income Statement For the Year Ended December 31, 2012

Fees earned $200,000 Expenses: Wages expense $90,000 Rent expense 45,000 Utilities expense 18,000 Supplies expense 3,000 Miscellaneous expense 4,000 Total expenses 160,000 Net income $ 40,000

2.Prepare a retained earnings statement for the current year ending Dec.

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