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On June 1 of this year, J. Larkin, Optometrist, established the Larkin Eye Clinic. The clinic's account names are presented below. Transactions completed during the month follow.Larkin deposited $20,000 in a bank account in the name of the business.Paid the office rent for the month, $980, Ck. No. 1001 (Rent Expense).Bought supplies for cash, $420, Ck. No. 1002.Bought office equipment on account from NYC Office Equipment Store, $7,160.Bought a computer from Warden's Office Outfitters, $1,730, paying $800 in cash and placing the balance on account, Ck. No. 1003.Sold professional services for cash, $4,310 (Professional Fees).Paid on account to Warden's Office Outfitters, $930, Ck. No. 1004.Received and paid the bill for utilities, $450, Ck. No. 1005 (Utilities Expense).Paid the salary of the assistant, $1,230, Ck. No. 1006 (Salary Expense).Sold professional services for cash, $3,330 (Professional Fees).Larkin withdrew cash for personal use, $1,900, Ck. No. 1007.Record the transactions and the balances after each transaction.After all transactions have been entered, enter the total assets and the total liabilities plus owner's equity in the entry boxes below the transactions. If the two totals are not equal, first check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.Enter increases to accounts as positive amounts and decreases to accounts as negative amounts. If an amount box does not require an entry, leave it blank or enter "0" .

Question

On June 1 of this year, J. Larkin, Optometrist, established the Larkin Eye Clinic. The clinic's account names are presented below. Transactions completed during the month follow.

  1. Larkin deposited $20,000 in a bank account in the name of the business.
  2. Paid the office rent for the month, $980, Ck. No. 1001 (Rent Expense).
  3. Bought supplies for cash, $420, Ck. No. 1002.
  4. Bought office equipment on account from NYC Office Equipment Store, $7,160.
  5. Bought a computer from Warden's Office Outfitters, $1,730, paying $800 in cash and placing the balance on account, Ck. No. 1003.
  6. Sold professional services for cash, $4,310 (Professional Fees).
  7. Paid on account to Warden's Office Outfitters, $930, Ck. No. 1004.
  8. Received and paid the bill for utilities, $450, Ck. No. 1005 (Utilities Expense).
  9. Paid the salary of the assistant, $1,230, Ck. No. 1006 (Salary Expense).
  10. Sold professional services for cash, $3,330 (Professional Fees).
  11. Larkin withdrew cash for personal use, $1,900, Ck. No. 1007.
  1. Record the transactions and the balances after each transaction.
  2. After all transactions have been entered, enter the total assets and the total liabilities plus owner's equity in the entry boxes below the transactions. If the two totals are not equal, first check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.
    Enter increases to accounts as positive amounts and decreases to accounts as negative amounts. If an amount box does not require an entry, leave it blank or enter "0" .
check_circleAnswer
Step 1

1

Recording and balancing  of  transactions in the financial statement model.

Financial Statement Model
Stockholder's Equity
Transactions
Asset
Liabilities
=
Office
Accounts
Expenses
Contributed
Revenue
Cash in $Supplies+Equipment
Payable in
Drawings
in $
capital in S
in $
in $
S
20,000
1
20,000
0
0
0
0
0
+
+
+
Balance
20,000
0
0
20,000
0
0
0
+
+
+
+
980
2
0
0
0
0
0
C
980
+
+
+
+
Balance
19,020
-420
18,600
0
0
C
20,000
0
980
+
+
3
420
0
+
+
+
+
Balance
420
20,000
C
0
980
+
+
4
0
0
7.160
7,160
1,730
7.160
7,160
0
+
+
+
+
Balance
18,600
420
20,000
C
0
980
+
+
+
-
5
-800
0
930
0
+
+
+
+
17,800
4,310
22,110
Balance
420
8,890
8,090
20,000
C
C
980
+
+
+
+
-
6
0
0
0
0
4,310
0
+
+
+
+
8,090
20,000
0
Balance
420
8,890
0
4,310
980
+
+
+
+
930
7,160
7
930
0
0
0
0
+
+
+
Balance
21,180
8,890
20,000
4,310
980
420
+
+
+
8
-450
0
0
450
0
+
+
+
+
Balance
20,730
8,890
7,160
20,000
0
4,310
1,430
420
+
+
-
-1,230
0
10
0
4,310
1,230
0
+
+
+
+
Balance
19,500
8,890
7,160
20,000
C
2,660
420
+
+
-
10
3,330
22,830
0
3.330
0
0
+
+
+
+
2,660
Balance
8,890
7,160
20,000
0
7,640
420
+
+
+
+
11
-1,900
0
0
1900
0
0
0
+
+
+
+
20,930
Balance
8.890
Z160
20.000
1900
Z640
2.660
420
+
+
+
30,240
30,240
OO
2Ol
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Image Transcriptionclose

Financial Statement Model Stockholder's Equity Transactions Asset Liabilities = Office Accounts Expenses Contributed Revenue Cash in $Supplies+Equipment Payable in Drawings in $ capital in S in $ in $ S 20,000 1 20,000 0 0 0 0 0 + + + Balance 20,000 0 0 20,000 0 0 0 + + + + 980 2 0 0 0 0 0 C 980 + + + + Balance 19,020 -420 18,600 0 0 C 20,000 0 980 + + 3 420 0 + + + + Balance 420 20,000 C 0 980 + + 4 0 0 7.160 7,160 1,730 7.160 7,160 0 + + + + Balance 18,600 420 20,000 C 0 980 + + + - 5 -800 0 930 0 + + + + 17,800 4,310 22,110 Balance 420 8,890 8,090 20,000 C C 980 + + + + - 6 0 0 0 0 4,310 0 + + + + 8,090 20,000 0 Balance 420 8,890 0 4,310 980 + + + + 930 7,160 7 930 0 0 0 0 + + + Balance 21,180 8,890 20,000 4,310 980 420 + + + 8 -450 0 0 450 0 + + + + Balance 20,730 8,890 7,160 20,000 0 4,310 1,430 420 + + - -1,230 0 10 0 4,310 1,230 0 + + + + Balance 19,500 8,890 7,160 20,000 C 2,660 420 + + - 10 3,330 22,830 0 3.330 0 0 + + + + 2,660 Balance 8,890 7,160 20,000 0 7,640 420 + + + + 11 -1,900 0 0 1900 0 0 0 + + + + 20,930 Balance 8.890 Z160 20.000 1900 Z640 2.660 420 + + + 30,240 30,240 OO 2Ol

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Step 2

2.

Computation of accounting equ...

Assets Liabilities Stockholders equity
S30,240-S7,160+S23,080
S30,240=S30,240
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Assets Liabilities Stockholders equity S30,240-S7,160+S23,080 S30,240=S30,240

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