BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

During the first month of operations, Landish Modeling Agency recorded transactions in T account form. Foot and balance the accounts. Then prepare a trial balance, an income statement, a statement of owner’s equity, and a balance sheet dated March 31, 20--.

images

To determine

Balance the accounts and prepare a trial balance, an income statement, a statement of owners’ equity, and a balance sheet.

Explanation

T-account:

T-account is the form of the ledger account, where the journal entries are posted to this account. It is referred to as the T-account, because the alignment of the components of the account resembles the capital letter ‘T’.

Trial balance:

Trial balance is the summary of accounts, and their debit and credit balances at a given time.  It is usually prepared at end of the accounting period.  Debit balances are listed in left   column and credit balances are listed in right column.  The totals of debit and credit column should be equal.  Trial balance is useful in the preparation of the financial statements.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement. In partnership, the division is often recorded in the lower portion of the income statement.

Statement of Owners’ equity: This statement reports the beginning stockholder's equity and all the changes which led to ending stockholder's equity. Additional capital, net income from income statement is added to and drawings or dividends are deducted from beginning stockholder's equity to arrive at the end result, closing balance of stockholder's equity.

Balance sheet: This financial statement reports a company’s resources (assets) and claims of creditors (liabilities) and stockholders (stockholders’ equity) over those resources. The resources of the company are assets which include money contributed by stockholders and creditors. Hence, the main elements of the balance sheet are assets, liabilities, and stockholders’ equity.

Balance the accounts:

Prepare the trial balance;

Company L
Trial Balance
March 31
Account NameDebit ($)Credit ($)
Cash16,455 
Accounts receivable2,600 
Supplies82 
Office furniture350 
office equipment2,800 
Accounts payable 2,882
Person R, Capital 8,200
Person R, Drawings2,200 
Modelling Fees 18,580
Salary expense3,400 
Rent expense1,600 
Utilities expense175 
 29,66229,662

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What role do past costs play in relevant costing decisions?

Managerial Accounting: The Cornerstone of Business Decision-Making

Why might purchasing power parity fail to hold?

Fundamentals of Financial Management (MindTap Course List)

If a companys board of directors wants management to maximize shareholder wealth, should the CEOs compensation ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

The matching principle states that debits should be matched with credits.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

What is the price-recovery component?

Cornerstones of Cost Management (Cornerstones Series)