# MASTERY PROBLEM Lisa Vozniak started her own business, We Do Windows. She offers interior and exterior window cleaning for local area residents. Lisa rents a garage to store her tools and cleaning supplies and has a part-time assistant to answer the phone and handle third-story work. (Lisa is afraid of heights.) The transactions for the month of July are as follows: (a) Lisa invested cash by making a deposit in a bank account for the business, \$8,000. (b) Paid rent for July, \$150. (c) Purchased a used van for cash, \$5,000. (d) Purchased tools on account from Clean Tools, \$600. (e) Purchased cleaning supplies that cost \$300. Paid \$200 cash and will pay the balance next month, \$100. (f) Paid part-time assistant (wages) for first half of month, \$100. (g) Paid for advertising, \$75. (h) Paid two-year premium for liability insurance on van, \$480. (i) Received cash from clients for services performed, \$800. (j) Performed cleaning services for clients on account, \$500. (k) Paid phone bill, \$40. (l) Received cash from clients for window cleaning performed on account in transaction (j), \$200. (m) Paid part-time assistant (wages) for last half of month, \$150. (n) Made partial payment on tools purchased in transaction (d), \$200. (o) Earned additional revenues amounting to \$800: \$600 in cash and \$200 on account. (p) Vozniak withdrew cash at the end of the month for personal expenses, \$100. REQUIRED 1. Enter the above transactions in an accounting equation similar to the one illustrated below. 2. After transaction (p), compute the balance of each account. 3. Prepare an income statement for We Do Windows for the month of July 20--. 4. Prepare a statement of owner’s equity for We Do Windows for the month of July 20--. 5. Prepare a balance sheet for We Do Windows as of July 31, 20--.

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

#### Solutions

Chapter
Section
Chapter 2, Problem 1MP
Textbook Problem

## MASTERY PROBLEMLisa Vozniak started her own business, We Do Windows. She offers interior and exterior window cleaning for local area residents. Lisa rents a garage to store her tools and cleaning supplies and has a part-time assistant to answer the phone and handle third-story work. (Lisa is afraid of heights.) The transactions for the month of July are as follows:(a) Lisa invested cash by making a deposit in a bank account for the business, \$8,000.(b) Paid rent for July, \$150.(c) Purchased a used van for cash, \$5,000.(d) Purchased tools on account from Clean Tools, \$600.(e) Purchased cleaning supplies that cost \$300. Paid \$200 cash and will pay the balance next month, \$100.(f) Paid part-time assistant (wages) for first half of month, \$100.(g) Paid for advertising, \$75.(h) Paid two-year premium for liability insurance on van, \$480.(i) Received cash from clients for services performed, \$800.(j) Performed cleaning services for clients on account, \$500.(k) Paid phone bill, \$40.(l) Received cash from clients for window cleaning performed on account in transaction (j), \$200.(m) Paid part-time assistant (wages) for last half of month, \$150.(n) Made partial payment on tools purchased in transaction (d), \$200.(o) Earned additional revenues amounting to \$800: \$600 in cash and \$200 on account.(p) Vozniak withdrew cash at the end of the month for personal expenses, \$100.REQUIRED1. Enter the above transactions in an accounting equation similar to the one illustrated below.2. After transaction (p), compute the balance of each account.3. Prepare an income statement for We Do Windows for the month of July 20--.4. Prepare a statement of owner’s equity for We Do Windows for the month of July 20--.5. Prepare a balance sheet for We Do Windows as of July 31, 20--.

Expert Solution

1.

To determine

Enter the transactions in an accounting equation.

### Explanation of Solution

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relation between resources or assets of a business and claims on the resources by the creditors, and the owners...

Expert Solution

2.

To determine

Compute the balance of each account after transaction (p).

Expert Solution

3.

To determine

Prepare an income statement for the month of July.

Expert Solution

4.

To determine

Prepare a statement of owners’ equity for the month of July.

Expert Solution

5.

To determine

Prepare a balance sheet for Company W as of July 31.

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