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    Accounting Equation, Financial Statements, Journal Entries

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    #1. Ramsey Corporation reported the following accounts and balances in its financial statements:
    Cash $35,000
    Inventory $10,200
    Equipment $19,500
    Accounts Payable $16,350
    Contributed capital $30,000
    Retained earnings $18,350

    Arrange the accounts and balances into the accounting equation using the following equation and then answer the following questions.

    Assets = liabilities + owners' equity

    1. What is the total amount of assets?
    2. What is the total amount of liabilites?
    3. What is the total amount of owners' equity?

    #2. After six months of operations, Right Way Lumber had the following revenues and expense balances:

    Supplies expense $11,000
    Service revenue $62,090
    Utilities expense $6,200
    Rent expense $14,700
    Wages expense #13,330

    Prepare an income statement in its proper format ending on June 30,2009. You should include the heading and left align it so the formatting is understandable.

    #3. Jim Smith had trouble finding a job, so he decided to start his own sole proprietorship by the name of Designers Inc. Jim is a Web site designer, and here are the results as of the end of the first year of his business.

    Accounts payable $12,100
    Cash $19,150
    Service revenue $20,000
    Contributed capital $21,000
    Wages expense $4,100
    Inventory $4,445
    Rent expense $5,000
    Equipment $16,325
    Supplies expense $4,080
    Retained earnings $6,820

    Prepare a balance sheet in proper format with the heading left aligned.

    #4. Woodcross LLC had the following events occur during the month of July:
    1. Received $40,000 from investors for contributed capital
    2. Borrowed %15,500 from the bank
    3. Paid $4,100 for rent
    4. Made sales on account for $12,500
    5. Made cash sales to customers totaling $29,700
    6. Repaid part of bank loan for $6,000
    7. Purchased new equipment for $5,000
    8. Paid $13,000 for wages
    9. Paid $1,900 for utilities

    Prepare the nine journal entries using the following example so that the formatting will be clear:

    Debit account #1 name $xxx
    Credit account #2 name $xxx

    No need to indent, include "debit" and "credit" for account name and amount for clarity.

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    https://brainmass.com/business/financial-statements/accounting-equation-financial-statements-journal-entries-300819

    Solution Preview

    #1.

    Assets = Liabilities + Owner's Equity
    Cash $35,000
    Inventory 10,200
    Equipment 19,500
    Accounts Payable $16,350
    Contributed capital $30,000
    Retained earnings 18,350

    Totals $64,700 $16,350 $48,350

    #2.

    Right Way Lumber
    Income Statement
    For the Six Months Ended June 30, 2009

    Service revenue ...

    Solution Summary

    #1. Ramsey Corporation reported the following accounts and balances in its financial statements:
    Cash $35,000
    Inventory $10,200
    Equipment $19,500
    Accounts Payable $16,350
    Contributed capital $30,000
    Retained earnings $18,350

    Arrange the accounts and balances into the accounting equation using the following equation and then answer the following questions.

    Assets = liabilities + owners' equity

    1. What is the total amount of assets?
    2. What is the total amount of liabilities?
    3. What is the total amount of owners' equity?

    #2. After six months of operations, Right Way Lumber had the following revenues and expense balances:

    Supplies expense $11,000
    Service revenue $62,090
    Utilities expense $6,200
    Rent expense $14,700
    Wages expense #13,330

    Prepare an income statement in its proper format ending on June 30,2009. You should include the heading and left align it so the formatting is understandable.

    #3. Jim Smith had trouble finding a job, so he decided to start his own sole proprietorship by the name of Designers Inc. Jim is a Web site designer, and here are the results as of the end of the first year of his business.

    Accounts payable $12,100
    Cash $19,150
    Service revenue $20,000
    Contributed capital $21,000
    Wages expense $4,100
    Inventory $4,445
    Rent expense $5,000
    Equipment $16,325
    Supplies expense $4,080
    Retained earnings $6,820

    Prepare a balance sheet in proper format with the heading left aligned.

    #4. Woodcross LLC had the following events occur during the month of July:
    1. Received $40,000 from investors for contributed capital
    2. Borrowed %15,500 from the bank
    3. Paid $4,100 for rent
    4. Made sales on account for $12,500
    5. Made cash sales to customers totaling $29,700
    6. Repaid part of bank loan for $6,000
    7. Purchased new equipment for $5,000
    8. Paid $13,000 for wages
    9. Paid $1,900 for utilities

    Prepare the nine journal entries using the following example so that the formatting will be clear:

    Debit account #1 name $xxx
    Credit account #2 name $xxx

    No need to indent, include "debit" and "credit" for account name and amount for clarity.

    $2.19

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