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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--.

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College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160
Chapter 2, Problem 1MP
Textbook Problem
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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.

Chapter 2, Problem 1MP, MASTERY PROBLEM Lisa Vozniak started her own business, We Do Windows. She offers interior and

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--.

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...

2.

To determine

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

3.

To determine

Prepare an income statement for the month of July.

4.

To determine

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

5.

To determine

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

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Chapter 2 Solutions

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
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Ch. 2 - When payment is made on an existing debt, which...Ch. 2 - Which of the following accounts does not appear on...Ch. 2 - Checkpoint Exercises Label each of the following...Ch. 2 - What is missing from the accounting equation...Ch. 2 - What are the effects of the following transactions...Ch. 2 - Classify the following accounts as assets (A),...Ch. 2 - Name and define the six major elements of the...Ch. 2 - Name and define the six major elements of the...Ch. 2 - List the three basic questions that must be...Ch. 2 - What is the function of an income statement?Ch. 2 - What is the function of a statement of owners...Ch. 2 - What is the function of a balance sheet?Ch. 2 - What are the three basic phases of the accounting...Ch. 2 - SERIES A EXERCISES ACCOUNTING ELE MENT S Label...Ch. 2 - THE ACCOUNTING EQUATION Using the accounting...Ch. 2 - Assets following (d): 32,200 EFFECTS OF...Ch. 2 - EFFECTS OF TRANSACTIONS (BALANCE SHEET ACCOUNTS)...Ch. 2 - FINANCIAL STATEMENT ACCOUNTS Label each of the...Ch. 2 - STATEMENT OF OWNERS EQUITY REPORTING NET INCOME...Ch. 2 - STATEMENT OF OWNERS EQUITY REPORTING NET INCOME...Ch. 2 - SERIES A PROBLEMS THE ACCOUNTING EQUATION Dr. John...Ch. 2 - EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION Jay...Ch. 2 - EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION Jay...Ch. 2 - EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION Jay...Ch. 2 - EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION Jay...Ch. 2 - ACCOUNTING ELEMENTS Label each of the following...Ch. 2 - THE ACCOUNTING EQUATION Using the accounting...Ch. 2 - EFFECTS OF TRANSACTIONS (BALANCE SHEET ACCOUNTS)...Ch. 2 - EFFECTS OF TRANSACTIONS (BALANCE SHEET ACCOUNTS)...Ch. 2 - FINANCIAL STATEMENT ACCOUNTS Label each of the...Ch. 2 - STATEMENT OF OWNERS EQUITY REPORTING NET INCOME...Ch. 2 - STATEMENT OF OWNERS EQUITY REPORTING NET LOSS...Ch. 2 - SERIES B PROBLEMS THE ACCOUNTING EQUATION Dr....Ch. 2 - EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION...Ch. 2 - EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION...Ch. 2 - STATEMENT OF OWNERS EQUITY Based on Problem 2-9B,...Ch. 2 - BALANCE SHEET Based on Problem 2-9B, prepare a...Ch. 2 - MANAGING YOUR WRITING Write a brief memo that...Ch. 2 - MASTERY PROBLEM Lisa Vozniak started her own...Ch. 2 - CHALLENGE PROBLEM In this chapter, you learned...

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