Problem 1-7A

ASSETS
May Cash + Account receivable + Supplies + Equipment
1
1
3
5
8
12
15
20
22
25
26
27
28
30
30
31
Total - - - -

Income Statement
THE GRAHAM CO.
Income Statement
For the Month Ended May 31

Revenue

Expenses

Net income

Statement of Owner's Equity

THE GRAHAM CO.
Statement of Owner's Equity
For the Month Ended May 31
H. Graham, Capital, May 1
Add:

Less:

H. Graham, Capital, May 31

Balance sheet
THE GRAHAM CO.
Balance Sheet
May 31

Assets

Liabilities

Owner's Equity

Statement of cash flow

THE GRAHAM CO.
Statement of Cash Flows
For Month Ended May 31

Cash flows from operating activities:

Cash flows from investing activities:

Cash flows from financing activities:

Net increase in cash
Cash balance, May 1
Cash balance, May 31
 LIABILITIES + EQUITY
= Account payable + Capital - Withdrawal + Revenue

= - - - -
- Expenses

-
Exercise 1-8
a.
Assets 137,000
Liabilities 110,000

Total equity 27,000

b.
Beginning of the year:
Assets - beginning balance 259,000
Equity - beginning balance 194,250

During the year:

Assets rise 80,000
Liabilities rise 52,643

Equity at the end of the year?

Way 1:
Liabilities - beginning 64,750
Assets - ending 339,000
Liabilities - ending 117,393

Equity - ending 221,607

Way 2:
Change in equity 27,357
Equity - ending 221,607

c.
Beginning of the year:
Liabilities - beginning 57,000

During the year:

Assets rise 60,000
Liabilities decrease (16,000)

End of the year

Assets - ending 190,000

Assets - beginning 130,000

Equity - beginning 73,000
Liabilities - ending 41,000
Equity - ending 149,000
Problem 1-7A
ASSETS
May Cash + Account receivable + Supplies + Equipment
1 43,000
1 (2,200)
3 1,940
5 (750)
8 5,800
12 2,800
15 (850)
20 2,800 (2,800)
22 4,000
25 4,000 (4,000)
26 (1,940)
27
28 (850)
30 (400)
30 (260)
31 (2,000)
Total 46,350 - - 1,940

Income Statement
THE GRAHAM CO.
Income Statement
For the Month Ended May 31

Revenue
Consulting service revenue
Expenses
Rent expense
Cleaning expense
Salary expense
Advertising expense
Telephone expense
Utilities expense
Total expenses
Net income
Statement of Owner's Equity
THE GRAHAM CO.
Statement of Owner's Equity
For the Month Ended May 31

H. Graham, Capital, May 1

Add:
Investment by Owner
Net income

Less:
Withdrawals by Owner
H. Graham, Capital, May 31

Balance sheet
THE GRAHAM CO.
Balance Sheet
May 31

Assets
Cash
Equipment
Total assets

Liabilities
Account payable

Owner's Equity
Capital
Total liabilites and equity

Statement of cash flow

THE GRAHAM CO.
Statement of Cash Flows
For Month Ended May 31

Cash flows from operating activities:

Cash received from customers
Cash paid for rent
Cash paid to employees
Cash paid for cleaning
Cash paid for telephone
Cash paid for utilities
Net cash provided by operating activities
Cash flows from investing activities:
Purchase of equipment
Net cash provided by investing activities
Cash flows from financing activities:
Investment by owner
Withdrawals by owner
Net cash provided by financing activities
Net increase in cash
Cash balance, May 1
Cash balance, May 31

Problem 1-9A
ASSETS

May Cash + Account receivable + Supplies + Equipment

a 67,000 11,000
b (15,000)
c (12,000) 12,000
d 1,000 1,700
e (460)
f 2,400
g 4,000
h (3,025)
i 1,800 (1,800)
j (500)
k (1,800)
Total 40,015 600 1,000 24,700
Note: The table above does not show new balances after each transaction, you could refer to the textbook and prepare yourself

Net income 4,140

 LIABILITIES + EQUITY
= Account payable + Capital - Withdrawal + Revenue
43,000

1,940

5,800
2,800

4,000

(1,940)
85

(2,000)
= 85 43,000 (2,000) 12,600

12,600

2,200
750
1,700
85
400
260
5,395
7,205
 -

43,000
7,205

2,000
48,205

46,350
1,940
48,290

85

48,205
48,290 TRUE

12,600
(2,200)
(1,700)
(750)
(400)
(260)
7,290

(1,940)
 (1,940)

43,000
(2,000)
41,000
46,350
-
46,350 TRUE

LIABILITIES + EQUITY

Building = Account payable Note payable + Capital

78,000
144,000 129,000

2,700

(500)

144,000 = 2,200 129,000 78,000

fer to the textbook and prepare yourself
- Expenses
Investment
(2,200) Rental (furniture) expense
Office equipment
(750) cleaning expense
Revenue
Revenue
(850) Salary expense
Revenue
Revenue
Revenue
Office equipment
(85) Advertising expense
(850) Salary expense
(400) Telephone expense
(260) Utilities expense
Withdrawal
(5,395)
 + EQUITY

- Withdrawal + Revenue - Expenses

(460)
2,400
4,000
(3,025)

(1,800)
(3,025) 6,400 (2,260)