Question

The T account balances for the accounts of Rya’s Planning Services as of January 31, 2019 are listed below.


Cash $ 21,400

Accounts Receivable 17,400

Office Supplies 500

Equipment 14,000

Accounts Payable 9,000

Rya Page, Capital 28,400

Rya Page, Drawing 5,500

Planning Fees Income 26,750

Office Supplies Expense 250

Rent Expense 850

Salaries Expense 3,500

Utilities Expense 750


Prepare an income statement for the Rya’s Planning Services for the month ended January 31, 2019.

Prepare a statement of owner’s equity for Rya’s Planning Services for the month ended January 31, 2019.

Prepare a balance sheet for Rya’s Planning Services as of January 31, 2019.

Answer 1

Answer:

Income Statement

Planning Fees Income    26,750

Office Supplies Expense  250

Rent Expense                    850

Salaries Expense           3,500

Utilities Expense              750  

Total expenses              5,350

Net income                     21,400

Statement of Owner's equity

Rya Page Capital     28,400

Net income               21,400

Rya Page, Drawings (5,500)

Ending Rya Page     44,300

Balance Sheet

Assets  

Cash                           21,400

Accounts Receivable 17,400

Office Supplies              500

Total Current             39,300

Non current

Equipment                 14,000

Total Assets                53,300

Liabilities  

Accounts Payable 9,000

Equity  

Rya Page, Capital 44,300

Total Laiblities + Equity 53,300

Explanation:

First we deteminate net income as revenues less expenses

Then, we solve for the Rya page capital account which is the current balance plus net income less drawins

This amount is used for the balance sheet.

We check if the balance sheet is correct by cheking the accounting equation:

assets = liabilities + equity

53,300 = 9,000 + 44,300