80.2K

Verified Solution

Link Copied!

Lisa Vozniak started her own business, We Do Windows. She offers interior and exterior window cleaning for local area residents. Lisa rents a garage to store her tools and cleaning supplies and has a part-time assistant to answer the phone and handle third-story work. (Lisa is afraid of heights.) The transactions for the month of July are as follows: (a) Lisa invested cash by making a deposit in a bank account for the business, $8,000. (b) Paid rent for July, $150. (c) Purchased a used van for cash, $5,000. (d) Purchased tools on account from Clean Tools, $600. (e) Purchased cleaning supplies that cost $300. Paid $200 cash and will pay the balance next month, $100. (f) Paid part-time assistant (wages) for first half of month, $100. (g) Paid for advertising, $75. (h) Paid two-year premium for liability insurance on van, $480. (i) Received cash from clients for services performed, $800. (j) Performed cleaning services for clients on account, $500. (k) Paid phone bill, $40. (l) Received cash from clients for window cleaning performed on account in transaction (j), \$200. (m) Paid part-time assistant (wages) for last half of month, $150. (n) Made partial payment on tools purchased in transaction (d), \$200. (n) Made partial payment on tools purchased in transaction (d), \$200. (o) Earned additional revenues amounting to $800 : $600 in cash and $200 on account. (p) Vozniak withdrew cash at the end of the month for personal expenses, $100. Required: 1. Enter the above transactions in an accounting equation similar to the one illustrated below. 2. After transaction (p), compute the balance of each account. 3. Prepare an income statement for We Do Windows for the month of July 20--. 4. Prepare a statement of owner's equity for We Do Windows for the month of July 20--. 5. Prepare a balance sheet for We Do Windows as of July 31, 20--. 1-2. Enter the transactions for July in the accounting equation below. After transaction (p), compute the balance of each account. Additional Instructions Owner's Equity (Owner's Investment) (Earnings) , Capital Lisa Vozniak, Drawing Revenues Expenses Description 3. Prepare an income statement for We Do Windows for the month of July 20-Income Statement Instructions We Do Windows Income Statement (Label) \begin{tabular}{|l|l|} \hline 1 & (Label) \\ \hline 2 & \\ \hline 3 & (Label) \\ \hline 4 & \\ \hline 5 & \\ \hline 6 & - \\ \hline 7 & - \\ \hline 8 & \\ \hline 9 & \\ \hline \end{tabular} 4. Prepare a statement of owner's equity for We Do Windows for the month of July 20-- Statement of Owner's Equity Instructions 5. Prepare a balance sheet for We Do Windows as of July 31, 20--. Balance Sheet Instructions Balance Sheet \begin{tabular}{|l|l|l|} \hline 1 & Assets \\ \hline 2 & & \\ \hline 3 & & \\ \hline 4 & & \\ \hline 6 & & Liabilities \\ \hline 7 & \\ \hline 8 & \\ \hline 9 & Owner's Equity \\ \hline 10 & \\ \hline 11 & \\ \hline 12 & \\ \hline 13 & \\ \hline \end{tabular}