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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

CHALLENGE PROBLEM

This problem challenges you to apply your cumulative accounting knowledge to move a step beyond the material in the chapter.

Provided below is a partial work sheet for Ardery Advising.

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REQUIRED

During January, Ardery made an additional investment of $1,200. Prepare an income statement, statement of owners equity, and balance sheet for Ardery Advising.

To determine

Prepare the income statement, statement of owners’ equity and balance sheet

Explanation

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.

Prepare an income statement of A Advising for the month ended January 31, 20---.

A Advising
Income Statement
For Month Ended January 31, 20--
ParticularsAmount ($)Amount ($)
Revenues:  
     Advertising fees 3,802
Expenses:  
     Wages expense1,800 
     Advertising expense400 
     Rent expense1,500 
     Supplies expense120 
     Phone expense300 
     Electricity expense44 
     Insurance expense200 
     Gas and oil expense38 
     Depreciation expense – office equipment1,000 
     Miscellaneous  expense500 
    Total Expenses (5,902)
Net loss $(2,100)

Table (1)

Statement of owners’ equity: This statement reports the beginning owner’s equity and all the changes, which led to ending owners’ equity. Additional capital, net income from income statement is added to and a drawing is deducted from beginning owner’s equity to arrive at the result, ending owner’s equity.

Prepare a statement of owner’s equity of A Advising for the month ended January 31, 20---...

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