Question & Answer: In September Andrew Co., began operations as an architect. The company had…..

In September Andrew Co., began operations as an architect. The company had the following transactions during the month.

Sept 1. Andrew invested $45,000 cash

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Sept.2. The Company purchased $6,200 for office equipment.

Sept 3. The company purchased $500 in supplies and records supply inventory.

Sept 4. The company hires Michelle Monday as an administrative assistant.

Sept 12. The company invoices the Jake Co., for work performed in the amount of $3,200.

Sept 15. The company receives a check in the amount of $1,300 from the Ethan Co., for work to be                                              performed in October.

Sept 18. Pays telephone bill $400

Sept 20. The company invoices the Morgan Co., for work performed in the amount of $4,200.

Sept 21. Purchases a computer at a cost of $1,200 (treated as an asset)

Sept 25. Receives payment from Jake Co., for the entire amount due.

Sept 30. Pays a bill for legal services in the amount of $600.

Sept 30. Pays Michelle Monday $1,300 for wages earned in September.

Sept.30 It is determined that only $200 of the supplies purchased remains at end of month.

Sept 30. Invoices Sam Co., for $1,000 for services performed.

Sept 30. Pays rent for both September and October, $2,100 per month.

REQUIRED:

Prepare all journal entries making sure that debits equal credits.

Prepare a trial balance making sure debits equal credits

Prepare an income statement for the month of September.

Prepare a balance sheet as of September 30th. Make sure total assets equals total liabilities & owner’s equity

Prepare the closing entry to transfer net income to owner’s equity

Expert Answer

 

Answer:
Journal
Date Account title Debit Credit
1-Sep Cash $                        45,000
Owner’s Capital $                        45,000
2-Sep Office Equipment $                          6,200
Cash $                          6,200
3-Sep Supplies $                              500
Cash $                              500
4-Sep No entry
No entry
12-Sep Account receivable $                          3,200
Service Revenue $                          3,200
15-Sep Cash $                          1,300
Unearned revenue $                          1,300
18-Sep Telephone expense $                              400
Cash $                              400
20-Sep Account receivable $                          4,200
Service Revenue $                          4,200
21-Sep Computer $                          1,200
Cash $                          1,200
25-Sep Cash $                          3,200
Account receivable $                          3,200
30-Sep Legal Expense $                              600
Cash $                              600
30-Sep Salaries Expense $                          1,300
Cash $                          1,300
30-Sep Supplies Expense $                              300
Supplies $                              300
30-Sep Account receivable $                          1,000
Service Revenue $                          1,000
30-Sep Prepaid Rent $                          2,100
Rent Expense $                          2,100
Cash $                          4,200
Trial Balance
Debit Credit Work Note:
Cash $                        35,100 (45,000-6,200-500+1,300-400+1,200+3,200-600-1,300-4,200)
Accounts Receivable $                          5,200 (3,200+4,200-3,200+1,000)
Supplies $                              200 (500-300)
Prepaid Rent $                          2,100
Office Equipment $                          6,200
Computer $                          1,200
Owner’s Capital $                        45,000
Service Revenue $                          8,400 (3,200+4,200+1,000)
Unearned Revenue $                          1,300
Rent Expense $                          2,100
Salaries Expense $                          1,300
Supplies Expense $                              300
Legal Expense $                              600
Telephone Expense $                              400
Totals $                        54,700 $                        54,700
Income Statement
For the Month of September
Service Revenue $                          8,400
Expenses:
Rent Expense $                          2,100
Salaries Expense $                          1,300
Supplies Expense $                              300
Legal Expense $                              600
Telephone Expense $                              400 $                          4,700
Operating Profit $                          3,700
Balance Sheet
As at September 30
Asset Liabilities
Cash $                        35,100 Unearned Revenue $                    1,300
Accounts Receivable $                          5,200 Owner’s Capital $                  48,700 (45,000+3,700)
Supplies $                              200
Prepaid Rent $                          2,100
Office Equipment $                          6,200
Computer $                          1,200
Totals $                        50,000 Totals $                  50,000

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