Answered Essay: A small one-person business is just starting. It will provide housekeeping and lawn-care services for other firms. Following are the start-up financia

PROBLEMs 65 A Borrow $500 from National Bank and Trust. B. Pay wages of $100. h. Pay federal tax of $20. iPay rent of $50. j Pay dividends of $30. k. End of month. 5. A small one-person business is just starting. It will provide housekeeping and lawn-care services for other firms. Following are the start-up financial events for the company: a Place SS000 into a checking account for the company by the proprietor b. Buy cleaning equipment and lawn cquipment for cash, $1,500. C. Buy supplies on credit from Janitor Supply Co, $200. d. First job pays $450 for lawn services. G. Bill R and J Company for housekeeping ser. vices$500. Pay wages of $300. B. Pay truck expenses at Shell Service Station, $120. h. R and pays their bill to the company. i Purchase supplies for $200. iPay Janitor Supply Co. in full. Generate financial statements. or Ajax Inc., set up the initial Balance Sheet, make the entries for the month using the Accounting Equation, and present the Income Statement for the next month and the ending Balance Sheet. At the end of this month, the following balances are in the accounts: Cash $5,000, inventory S10,000, cquipment $3,000, and $10,000, one Jones S10000, common stock $10,000, retained earnings $8,000. (Note that the value of the inventory sold is unknown at the time of sale. However, the value of the remaining inventory is known at the end of the month. The value sold is the difference between the inventory received and the inventory remaining) a Buy inventory from Jones on credit, S10,000. b. Sell goods for $4,000. G. Sell common stock, $1,000. d. Pay wages, $2,000. C. Pay tax, $1,000. A Sell goods to Smith on credit for $15,000. 8 Pay rent, SI00. h. Pay Jones $2,000. Depreciate equipment $200. j Inventory at the end of the month is worth S7,000. k. End of month. 7. For Gis whiz Inc., set up the March Income State ment and the Balance Sheet at the end of March also generate the CF Statement. Giswhiz is an or ganization of manufacturers representatives who sell products for other firms and do not manufacture any of their own products. The companys income is derived from sales commissions. Gis whiz also has some equipment that it rents to customers.

Problem N0. 6

A small one-person business is just starting. It will provide housekeeping and lawn-care services for other firms. Following are the start-up financial events for the company: a. Place $5,000 into a checking account for the company by the proprietor. b. Buy cleaning equipment and lawn equipment for cash, $1,500. c. Buy supplies on credit from Janitor Supply Co, $200. d. First job pays $450 for lawn services. e. Bill R and J Company for housekeeping services, $500. f. Pay wages of $300. g. Pay truck expenses at Shell Service Station, $120. h. R and J pays their bill to the company. i. Purchase supplies for $200. j. Pay Janitor Supply Co. in full. k. Generate financial statements. For Ajax Inc., set up the initial Balance Sheet, make the entries for the month using the Accounting Equation, and present the Income Statement for the next month and the ending Balance Sheet. At the end of this month, the following balances are in the accounts: Cash $5,000, inventory $10,000, equipment $3,000, and $10,000, one Jones $10000, common stock $10,000, retained earnings $8,000. (Note that the value of the inventory sold is unknown at the time of sale. However, the value of the remaining inventory is known at the end of the month. The value sold is the difference between the inventory received and the inventory remaining.) a. Buy inventory from Jones on credit, $10,000. b. Sell goods for $4,000. c. Sell common stock, $1,000. d. Pay wages, $2,000. e. Pay tax, $1,000. f. Sell goods to Smith on credit for $15,000. g. Pay rent, $100. h. Pay Jones $2,000. i. Depreciate equipment $200. j. Inventory at the end of the month is worth $7,000. k. End of month. For Gis whiz Inc., set up the March Income Statement and the Balance Sheet at the end of March also generate the C/F Statement. Giswhiz is an organization of manufacturers’ representatives who sell products for other firms and do not manufacture any of their own products. The company’s income is derived from sales commissions. Giswhiz also has some equipment that it rents to customers.

Expert Answer

 

Ajax Inc.
Balance Sheet(Initial)
Assets Liabilities & equities
Cash $    5,000 Jones(A/P) $      10,000
Inventory $ 10,000 Common stock $      10,000
Equipment $    3,000 Retained earnings $        8,000
Land $ 10,000
Total Assets $ 28,000 Total liabilities and equities $      28,000
Accounting equation
Transaction Cash A/R Inventory Equipment Land Accounts payable Common stock retained earnings Income Expense
Beg. Bal 5000 10000 3000 10000 10000 10000 8000
a +10000 +10000
b +4000 4000
c +1000 +1000
d -2000 2000
e -1000 1000
f +15000 15000
g -100 100
h -2000 -2000
i -200 200
j -13000 13000
Total 4900 15000 7000 2800 10000 18000 11000 8000 19000 16300
Income statement
Sales Revenue 19000
Less: Cost of goods sold -13000
Gross Profit 6000
Less: Operating expenses -3300
Net Income added to retained earnings 2700
Ajax Inc.
Balance SheetEnding)
Assets Liabilities & equities
Cash $    4,900 Jones(A/P) $      18,000
A/R $ 15,000 Common stock $      11,000
Inventory $    7,000 Retained earnings $      10,700
Equipment $    2,800 (8000+2700)
Land $ 10,000
Total Assets $ 39,700 Total liabilities and equities $      39,700
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