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

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 30^th. 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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