Chapter  3.1: Accounting Process-1 [3.

1]-1

Chapter  3.1: Transaction Summary

Solution
Problem-1 [Kieso 9e: DO IT 1-2] Classify the following items as investment by owner (I), owner’s drawings (D),
revenues (R), or expenses (E). Then indicate whether each item increases or decreases owner’s equity:
(1) Drawings (3) Advertising Expense
(2) Rent Revenue (4) Owner puts personal assets into the business.

Solution: Problem-1
1. Drawings is owner’s drawings (D); it decreases owner’s equity.
2. Rent Revenue is revenue (R); it increases owner’s equity.
3. Advertising Expense is an expense (E); it decreases owner’s equity.
4. When the owner puts personal assets into the business, it is investment by owner (I); it increases owner’s equity.

Problem-2 [Kieso 9e: DO IT 1-4] Presented below is selected information related to Broadway Company at December
31, 2010. Broadway reports financial information monthly
Accounts Payable 3000 Salaries Expenses 16500
Cash 7000 Notes Payable 25000
Advertising Expenses 6000 Rent Expenses 10500
Service Revenue 54000 Accounts Receivable 13500
Equipment 29000 Drawings 7500

(a) Determine the total assets of Broadway Company at December 31, 2010.
(b) Determine the net income that Broadway Company reported for December 2010.
(c) Determine the owner’s equity of Broadway Company at December 31, 2010

Solution: Problem-2
(a) Determination of Total Assets: (b) Determination of Net Income:
Cash 7,000 Revenues Tk. Tk.
Service revenue 54,000
Accounts Receivable 13,500 Expenses
Equipment 29,000 Rent expense 10,500
Salaries expense 16,500
49,500 Advertising expense 6,000
Total expenses 33,000
Net income 21,000
[3.1]-2 SAYEED AHMAD, BCS (General Education); Lecturer (Management); Cell: 01917542290

(c) Determination of Owner’s Equity:

Broadway Company
Balance Sheet
December 31, 2010
Assets

Cash Tk. 7,000

Accounts receivable 13,500
Equipment 29,000
Total Assets Tk. 49,500

Liabilities & Owner’s Equity

Liabilities
Notes payable Tk. 25,000
Accounts payable 3,000
Total liabilities 28,000
Owner’s Equity (49,500-28,000) 21,500
Total Liabilities & Owner’s Equity Tk. 49,500

So, the ending owner’s equity balance of Broadway Company is Tk. 21,500.

Problem-3 [Kieso 9e: BE1-2] Given the accounting equation, answer each of the following questions.
(a) The liabilities of McGlone Company are Tk.120,000 and the owner’s equity is Tk.232,000. What is the
amount of McGlone Company’s total assets?
(b) The total assets of Company are Tk.190,000 and its owner’s equity is Tk.80,000. What is the amount of its
total liabilities?
(c) The total assets of McGlone Co. are Tk.800,000 and its liabilities are equal to one half of its total assets .
What is the amount of McGlone Co.’s owner’s equity?

Solution: Problem-3
(a) Tk. 120,000 + Tk. 232,000 = Tk. 352,000 (Total assets).
(b) Tk. 190,000 – Tk. 80,000 = Tk. 110,000 (Total liabilities).
(c) Tk. 800,000 – 0.5(Tk. 800,000) = Tk. 400,000 (Owner’s equity).

Problem-4 [Kieso 9e: BE1-3] At the beginning of the year, Hernandez Company had total assets of Tk.800,000 and
total liabilities of Tk.500,000. Answer the following questions.
(a) If total assets increased Tk.150,000 during the year and total liabilities decreased Tk.80,000, what is the
amount of owner’s equity at the end of the year?
(b) During the year, total liabilities increased Tk.100,000 and owner’s equity decreased Tk.70,000. What is the
amount of total assets at the end of the year?
(c) If total assets decreased Tk.80,000 and owner’s equity increased Tk.120,000 during the year, what is the
amount of total liabilities at the end of the year?

Solution: Problem-4
(a) (Tk. 800,000 + Tk. 150,000) – (Tk. 500,000 – Tk. 80,000) = Tk. 530,000 (Owner’s equity).
(b) (Tk. 500,000 + Tk. 100,000) + (Tk. 800,000 – Tk. 500,000 – Tk. 70,000) = Tk. 830,000 (Assets).
(c) (Tk. 800,000 – Tk. 80,000) – (Tk. 800,000 – Tk. 500,000 + Tk. 120,000) = Tk. 300,000 (Liabilities).
Problem-5 [Kieso 9e: BE1-4] Use the expanded accounting equation to answer each of the following questions:
 Chapter  3.1: Accounting Process-1 [3.1]-3

(a) The liabilities of Lara Company are Tk.90,000. Brian Lara’s capital account is Tk.150,000; drawings are
Tk.40,000; revenues, Tk.450,000; and expenses, Tk.320,000. What is the amount of Lara Company’s total
assets?
(b) The total assets of Pereira Company are Tk.57,000. Karen Perry’s capital account is Tk.25,000; drawings
are Tk.7,000; revenues , Tk.50,000; and expenses, Tk.35,000. What is the amount of the company’s total
liabilities?
(c) The total assets of Yap Co. are Tk.600,000 and its liabilities are equal to two-thirds of its total assets. What
is the amount of Yap Co.’s owner’s equity?

Solution: Problem-5
i) Assets = Liabilities + Owner’s Equity
Or, Assets = Liability + (Beginning Investment + Additional Investment + Net Income –Drawings)
Or, 4,00,000 = 2,50,000 + (1,00,000 + 0 + Net Income – 15,000)
Or, 4,00,000 = 2,50,000 + 85,000 + Net Income
Or, 4,00,000 – 3,35,000 = Net Income
Or, Net Income = 65,000

ii) Assets = Liabilities + Owner’s Equity

Or, Assets = Liability + (Beginning Investment + Additional Investment + Net Income –Drawings)
Or, 4,60,000 = 3,00,000 + (1,50,000 + 50,000 + Net Income - 0)
Or, 4,60,000 = 3,00,000 + 2,00,000 + Net Income
Or, 4,60,000 – 5,00,000 = Net Income
Or, Net Income = - 40,000
Net Loss =40,000

iii) Assets = Liabilities + Owner’s Equity

Or, Assets = Liabilities + (Beginning Investment + Additional Investment + Net Income –Drawings)
Or, 5,90,000 = 4,00,000 + (1,60,000 + 15,000 + Net Income – 30,000)
Or, 5,90,000 = 4,00,000 + (1,75,000 + Net Income -30,000)
Or, 5,90,000 =4,00,000 + 1,45,000 + Net Income
Or, 5,90,000 =5,45,000 + Net Income
Or, Net Income = 5,90,00 - 5,45,000
Net Income =45,000

Problem-6 [Kieso 9e: E1-10; same as NU-2012] Lily Company had the following assets and liabilities on the dates
indicated.

December 31 Total Assets Total Liabilities

2009 Tk.400,000 Tk.250,000
2010 Tk.460,000 Tk.300,000
2011 Tk.590,000 Tk.400,000

Lily began business on January 1, 2009, with an investment of Tk.100,000.

Instructions
From an analysis of the change in owner’s equity during the year, compute the net income (or loss) for:
(a) 2009, assuming Lily’s drawings were Tk.15,000 for the year.
(b) 2010, assuming Lily made an additional investment of Tk.50,000 and had no drawings in 2010.
(c) 2011, assuming Lily made an additional investment of Tk.15,000 and had drawings of Tk.30,000 in 2011.

Solution: Problem-6
[3.1]-4 SAYEED AHMAD, BCS (General Education); Lecturer (Management); Cell: 01917542290

(a) Owner’s equity—12/31/09 (Tk. 400,000 – Tk. 250,000) Tk. 150,000

Less: Owner’s equity—1/1/09 100,000
Increase in owner’s equity 50,000
Add: Drawings 15,000
Net income for 2009 Tk. 65,000

(b) Owner’s equity—12/31/10 (Tk. 460,000 – Tk. 300,000) Tk. 160,000

Less: Owner’s equity—1/1/10—see (a) 150,000
Increase in owner’s equity 10,000
Less: Additional investment 50,000
Net loss for 2010 Tk. 40,000

(c) Owner’s equity—12/31/11 (Tk. 590,000 – Tk. 400,000) Tk. 190,000

Less: Owner’s equity—1/1/11—see (b) 160,000
Increase in owner’s equity 30,000
Less: Additional investment 15,000
Add: Drawings 30,000
Net income for 2011 Tk. 45,000

Problem-7 [NU-2010] Presented below are the balances of the assets and liabilities of Khandoker Delivery Service as
at 30 June, 2010. Also include are the revenue and expense figures of the business for June:
Delivery Service Revenue 4,100 Delivery Equipment 15,500
Accounts Receivable 900 Supplies 600
Accounts Payable 750 Notes Payable 8,000
Kayum Khandoker, Capital ? Rent Expenses 500
Salaries Expenses 2,000 Cash 650

Instructions: Prepare the Balance Sheet of Khandoker Delivery Service as at 30 June, 2010

Solution: Problem-7
 Chapter  3.1: Accounting Process-1 [3.1]-5

Problem-8 [Kieso 9e: E1-16] Presented below is information related to the sole proprietorship of Kevin Johnson,
attorney
Legal service revenue—2010 Tk.350,000
Total expenses—2010 211,000
Assets, January 1, 2010 85,000
Liabilities, January 1, 2010 62,000
Assets, December 31, 2010 168,000
Liabilities, December 31, 2010 85,000
Drawings—2010 ?

Instructions: Prepare the 2010 owner’s equity statement for Kevin Johnson’s legal practice.

Solution: Problem-8

KEVIN JOHNSON, ATTORNEY

Owner’s Equity Statement
For the Year Ended December 31, 2010
Kevin Johnson, Capital, January 1 (a) 23000
(+) Net Income (b) 139,000
162000
(-) Drawings (162000-83000) 79000
Kevin Johnson, Capital, December 31 (c) 83000

Supporting Computations
(a) Assets, January 1, 2010 $ 85,000
Liabilities, January 1, 2010 62,000
Capital, January 1, 2010 $ 23,000

(b) Legal service revenue $350,000

Total expenses 211,000
Net income $139,000

(c) Assets, December 31, 2010 $168,000

Liabilities, December 31, 2010 85,000
Capital, December 31, 2010 $ 83,000

Problem-9 [Kieso 9e: E1-12] The following information relates to Linda Stanley Co. for the year 2010:

Linda Stanley , Capital, January 1, 2010 48,000 Advertising expense 1,800

Linda Stanley , Drawing during 2010 6,000 Rent expense 10,400
Service revenue 62,500 Utilities expense 3,100
Salaries expense 30,000

Instructions:
After analyzing the data, prepare an income statement and an owner’s equity statement for the year ending December
31, 2010.
[3.1]-6 SAYEED AHMAD, BCS (General Education); Lecturer (Management); Cell: 01917542290

Solution: Problem- 9

Linda Stanley Company

Income Statement
For the Year Ended December 31, 2010
Revenues
Service Revenues 62,500
A. Total revenues 62500
Expenses
Salaries expenses 30000
Advertisement expenses 1800
Rent expenses 10400
Utilities expense 3100
B. Total expenses 45300
( − ) 17200
Linda Stanley Company
Owner’s Equity Statement
For the Year Ended December 31, 2010
Linda Stanley, Capital, January 1 48,000
(+) Net Income (a) 17200
65200
(-) Drawings 6000
Linda Stanley, Capital, December 31 83000

Problem-10 [Kieso 9e: P1-4A; same as NU BBS (Hons) 2009, 2006]

Mark Miller started his own delivery service, Miller Deliveries, on June 1, 2010. The following transactions occurred
during the month of June

June 1 Mark invested Tk.10,000 cash in the business.

2 Purchased a used van for deliveries for Tk.12,000. Mark paid Tk.2,000 cash and signed a note payable for
the remaining balance.
3 Paid Tk.500 for office rent for the month.
5 Performed Tk.4,400 of services on account.
9 Withdrew Tk.200 cash for personal use .
12 Purchased supplies for Tk.150 on account.
15 Received a cash payment of Tk.1,250 for services provided on June 5.
17 Purchased gasoline for Tk.100 on account.
20 Received a cash payment of Tk.1,500 for services provided.
23 Made a cash payment of Tk.500 on the note payable.
26 Paid Tk.250 for utilities.
29 Paid for the gasoline purchased on account on June 17.
30 Paid Tk.1,000 for employee salaries.

Instructions:
(i) Show the effect of above transactions on the accounting equation;
(ii) Prove the Accounting equation.
 Chapter  3.1: Accounting Process-1 [3.1]-7

Solution: Problem- 10 (i)

Miller Deliveries
Summary of Transactions
For the month of June 2010
Assets = Liabilities+ Owner’s Equity
Date/
Cash A/C Supplies Delivery = Notes A/C M. Miller, Remarks
Trans
Receivable Van Payable Payable Capital
June 1 10000 10000 Investment
2 (2000) 12,000 10,000
3 (500) (500) Rent expenses
5 4400 4400 Service revenue
9 (200) (200) Drawing
12 150 150
15 1250 (1250)
17 100 (100) Fuel expenses
20 1500 1500 Service revenue
23 (500) (500)
26 (250) (250) Utilities expenses
29 (100) (100)
30 (1000) (1000) salaries expenses
8,200 3150 150 12000 9500 150 13850
Total =23,500 Total= 23500

Solution: Problem- 10 (ii) : Proving accounting equation:

Assets = Liability + Owner’s Equity

or, Cash+ A/C Receivable + Supplies + Delivery Van = Notes Payable + A/C Payable + M. Miller, Capital
or, 8200+3150+150+12000= 9500+150+13850
or, 23500 = 23500 (Proved)

Problem-11 [NU-2011, 2008 ] Mahmod Enterprise completed the following transactions in July, 201l.
Jul 1 The owner sold his personal investment for Tk. 1, 50,000 and brought in as capital.
3 Paid rent Tk. 4,000
4 Purchase merchandise for cash Tk. 60,000'
8 Purchase merchandise from Aziz Tk. 90,000 on account.
10 Borrowed Tk. 60,000 from Dhaka Bank and sign a note payable
15 Sold merchandise for cash Tk. 75,000 (Cost Tk. 60,000).
20 Sold merchandise to Imran Tk. 1,00,000 (Cost Tk. 80,000)
25 Return merchandise sold on July 20, Tk. 5,000 (Cost Tk. 4,000)
30 Payment received from Accounts receivable Tk. 50,000
31 Paid advertising bill for Tk. 5,000.

Required: (i) Show the effect of above transactions on the accounting equation;
(ii) Prove the Accounting equation.
[3.1]-8 SAYEED AHMAD, BCS (General Education); Lecturer (Management); Cell: 01917542290

Solution: Problem- 11 (i)

Mahmod Enterprise
Summary of Transactions
For the month of July 2011
Assets = Liabilities + Owner’s Equity
Date/
Cash Merchandise A/C = Notes A/C Payable Mehedi, Remarks
Trans
Inventory Receivable Payable Capital
July 1 150000 150000 Investment
3 (4000) (4000) Rent expenses
4 (60000) 60000
8 90000 90000
10 60000 60000
15 75000 (60000) 15000 Profit on sales
20 (80000) 100000 20000 Profit on sales
25 4000 (5000) (1000) Sales return
30 50000 (50000)
31 (5000) (5000) Advert expenses
Total 266000 14000 45000 60000 90000 175000

Solution: Problem- 11 (ii) : Proving accounting equation:

Assets = Liability + Owner’s Equity
or, Cash + Merchandise Inventory + A/C Receivable = Notes Payable + A/C Payable + Mehedi, Capital
or, 266000+14000+45000= 60000+90000+175000
or, 325000 = 325000 (Proved)

Problem-12 [Kieso 9e: P1-1A] Barone’s Repair Shop was started on May 1 by Nancy Barone. A summary of May
transactions is presented below:
1. Invested Tk.10,000 cash to start the repair shop.
2. Purchased equipment for Tk.5,000 cash.
3. Paid Tk.400 cash for May office rent.
4. Paid Tk.500 cash for supplies.
5. Incurred Tk.250 of advertising costs in the Beacon News on account.
6. Received Tk.5,100 in cash from customers for repair service.
7. Withdrew Tk.1,000 cash for personal use .
8. Paid part-time employee salaries Tk.2,000.
9. Paid utility bills Tk.140.
10. Provided repair service on account to customers Tk.750.
11. Collected cash of Tk.120 for services billed in transaction (10).

Instructions
(a) Prepare a tabular analysis of the transactions;
(b) From an analysis of the owner’s equity columns, compute the net income or net loss for May.

Solution: Problem- 12 (i)

 Chapter  3.1: Accounting Process-1 [3.1]-9

Barone’s Repair Shop

Summary of Transactions
For the month of May 2011

Assets = Liabilities+ Owner’s Equity

Transaction Cash Office Supplies A/C = A/C Payable Banrone, Remarks
Equipment Receivable Capital
1 10000 10000 Investment
2 (5000) 5000
3 (400) (400) Rent expenses
4 (500) 500
5 250 (250) Advert. expenses
6 5100 5100 Service revenue
7 (1000) (1000) Drawings
8 (2000) (2000) Salaries expenses
9 (140) (140) Utility expenses
10 750 750 Service revenue
11 120 (120)
Total 6180 5000 500 630 250 12060
Total Assets= 12310 Total= 12310

Solution: Problem- 12 (ii)

Barone’s Repair Shop

Income Statement
For the month of May 2011
Revenues
Service Revenues 5100
750
A. Total revenues 5850
Expenses
Rent expenses 400
Advertisement expenses 250
Salaries expenses 2000
Utilities expense 140
B. Total expenses 2790
( − ) 3060

Problem-13 [Kieso 9e: P1-2A] Maria Gonzalez opened a veterinary business in Nashville, Tennessee, on August 1.
On August 31, the balance sheet showed Cash Tk.9,000, Accounts Receivable Tk.1,700, Supplies Tk.600, Office
Equipment Tk.6,000, Accounts Payable Tk.3,600, and M. Gonzalez, Capital Tk.13,700. During
September the following transactions occurred.
1. Paid Tk.2,900 cash on accounts payable.
[3.1]-10 SAYEED AHMAD, BCS (General Education); Lecturer (Management); Cell: 01917542290

2. Collected Tk.1,300 of accounts receivable.

3. Purchased additional office equipment for Tk.2,100, paying Tk.800 in cash and the balance on account.
4. Earned revenue of Tk.8,000, of which Tk.2,500 is paid in cash and the balance is due in October.
5. Withdrew Tk.1,000 cash for personal use .
6. Paid salaries Tk.1,700, rent for September Tk.900, and advertising expense Tk.300.
7. Incurred utilities expense for month on account Tk.170.
8. Received Tk.10,000 from Capital Bank–money borrowed on a note payable.
Instructions
(a) Prepare a tabular analysis of the September transactions beginning with August 31 balances.
(b) Prepare an income statement for September, an owner’s equity statement for September, and a balance sheet at
September 30.
Solution: Problem- 13 (i)

MARIA GANZALEZ, VETERINARIAN

Summary of Transactions
For the month of May 2011
Assets = Liabilities+ Owner’s Equity
Trans. Cash A/C Supplies Office = Notes A/C M. Gonza, Remarks
Receivable Equipment Payable Payable Capital
Balance 9000 1700 600 6000 - 3600 13700
1 (2900) (2900)
2 1300 (1300)
3 (800) 2100 1300
4 2500 5500 8000 Service revenue
5 (1000) (1000) Drawings
6 (1700) (1700) Salaries expense
6 (900) (900) Rent expense
6 (300) (300) Advert. expense
7 170 (170) Utilities expense
8 10000 10000
15200 5900 600 8100 10000 2170 17630
Total =29800 Total= 29800

Problem-14 [Kieso 9e: P1-1B] On April 1, Vinnie Venuchi established Vinnie’s T ravel Agency. The following
transactions were completed during the month

1. Invested Tk.15,000 cash to start the agency.

2. Paid Tk.600 cash for April office rent.
3. Purchased office equipment for Tk.3,000 cash.
4. Incurred Tk.700 of advertising costs in the Chicago Tribune, on account.
5. Paid Tk.800 cash for office supplies.
6. Earned Tk.11,000 for services rendered: Tk.3,000 cash is received from customers, and the balance of
Tk.8,000 is billed to customers on account.
7. Withdrew Tk.500 cash for personal use .
8. Paid Chicago Tribune amount due in transaction (4).
9. Paid employees’ salaries Tk.2,200.
10. Received Tk.4,000 in cash from customers who have previously been billed in transaction (6).

Instructions
(a) Prepare a tabular analysis of the transactions
(b) From an analysis of the owner’s equity columns , compute the net income or net loss for April.
Solution: Problem- 14 (i)

Vinnie’s Travel Agency

 Chapter  3.1: Accounting Process-1 [3.1]-11

Summary of Transactions
For the month of April 2011

Assets = Liabilities+ Owner’s Equity

Transaction Cash Office Supplies A/C = A/C Payable Banrone, Remarks
Equipment Receivable Capital
1 15000 15000 Investment
2 (600) (600) Rent expenses
3 (3000) 3000
4 700 (700) Advert. expenses
5 (800) 800
6 3000 8000 11000 Service revenue
7 (500) (500) Drawings
8 (700) (700)
9 (2200) (2200) Salaries expenses
10 4000 (4000)
Total 14200 3000 800 4000 00 22,000
Total Assets= 22,000 Total= 22,000

Solution: Problem- 14 (ii)

Vinnie’s Travel Agency

Income Statement
For the month of April 2011
Revenues
Service Revenues 11000
A. Total revenues 11,000
Expenses
Rent expenses 600
Advertisement expenses 700
Salaries expenses 2200
B. Total expenses 3500
( − ) 7500

Problem-15[Kieso 9e: P1-2B] Jenny Brown opened a law office, on July 1, 2010. On July 31, the balance sheet
showed Cash Tk.5,000, Accounts Receivable Tk.1,500, Supplies Tk.500, Office Equipment Tk.6,000, Accounts
Payable Tk.4,200, and Jenny Brown, Capital Tk.8,800. During August the following transactions occurred.
1. Collected Tk.1,200 of accounts receivable.
2. Paid Tk.2,800 cash on accounts payable.
3. Earned revenue of Tk.8,000 of which Tk.3,000 is collected in cash and the balance is due in September.
[3.1]-12 SAYEED AHMAD, BCS (General Education); Lecturer (Management); Cell: 01917542290

4. Purchased additional office equipment for Tk.2,000, paying Tk.400 in cash and the balance on account.
5. Paid salaries Tk.2,500, rent for August Tk.900, and advertising expenses Tk.400.
6. Withdrew Tk.700 in cash for personal use.
7. Received Tk.1,500 from Standard Federal Bank—money borrowed on a note payable.
8. Incurred utility expenses for month on account Tk.220.

Instructions
(a) Prepare a tabular analysis of the August transactions beginning with July 31 balances.
(b) Prepare an income statement for August, an owner’s equity statement for August, and a balance sheet at
August 31

Solution: Problem- 15 (i)

JENNY BROWN, LAWYER

Summary of Transactions
For the month of August 2010
Assets = Liabilities+ Owner’s Equity
Trans. Cash A/C Supplies Office = Notes A/C J. Brown, Remarks
Receivable Equipment Payable Payable Capital
Balance 5000 1500 500 6000 - 4200 8800
1 1200 (1200)
2 (2800) (2800)
3 3000 5000 8000 Service revenue
4 (400) 2000 1600
5 (2500) (2500) Salaries expense
5 (900) (900) Rent expenses
5 (400) (400) Advert. expense
6 (700) (700) Drawings
7 1500 1500
8 220 (220) Utility expenses
3000 5300 500 8000 1500 3220 12080
Total =16800 Total= 16800

Problem-16 [Kieso 9e: P1-4B]

Michelle Rodriguez started her own consulting firm, Rodriguez Consulting, on May 1, 2010. The following
transactions occurred during the month of May .

May 1 Michelle invested Tk.7,000 cash in the business.

 Chapter  3.1: Accounting Process-1 [3.1]-13

2 Paid Tk.900 for office rent for the month.

3 Purchased Tk.600 of supplies on account.
5 Paid Tk.125 to advertise in the County News.
9 Received Tk.4,000 cash for services provided.
12 Withdrew Tk.1,000 cash for personal use .
15 Performed Tk.6,400 of services on account.
17 Paid Tk.2,500 for employee salaries.
20 Paid for the supplies purchased on account on May 3.
23 Received a cash payment of Tk.4,000 for services provided on account on May 15.
26 Borrowed Tk.5,000 from the bank on a note payable.
29 Purchased office equipment for Tk.3,100 on account.
30 Paid Tk.175 for utilities.

Instructions
(a) Show the effects of the previous transactions on the accounting equation
(b) Prepare an income statement for the month of May.
(c) Prepare a balance sheet at May 31, 2010.

Solution: Problem- 16 (i)

Rodriguez Consulting
Summary of Transactions
For the month of May 2010
Assets = Liabilities+ Owner’s Equity
Date/
Cash A/C Supplies Office = Notes A/C Rodriguez, Remarks
Trans
Receivable Equipment Payable Payable Capital
May 1 7000 7000 Investment
2 (900) (900) Rent expense
3 600 600
5 (125) (125) Advert. expense
9 4000 4000 Service revenue
12 (1000) (1000) Drawings
15 6400 6400 Service revenue
17 (2500) (2500) Salaries expenses
20 (600) (600)
23 4000 (4000)
26 5000 5000
29 3100 3100
30 (175) (175) Utilities expenses
14700 2400 600 3100 5000 3100 12700
Total =20800 Total= 20800

(ii) Income Statement

For the month of May 2010
Revenues
Service Revenues (4000+6400) 10400
A. Total revenues 10400
Expenses
Rent expenses 900
[3.1]-14 SAYEED AHMAD, BCS (General Education); Lecturer (Management); Cell: 01917542290

Advertisement expenses 125

Salaries expenses 2500
Utility expenses 175
B. Total expenses 3700
( − ) 6700

(iii) Balance Sheet

May 31, 2010
Assets
Cash Tk. 14700
Accounts receivable 2400
Supplies 600
Office Equipment 3100
Total Assets Tk. 20,800

Liabilities & Owner’s Equity

Liabilities
Notes payable Tk. 5,000
Accounts payable 3,100
Total liabilities 8,100
Owner’s Equity
M. Rodriguez, Capital 12700
Total Liabilities & Owner’s Equity Tk. 20,800