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TOTAL ASSETS - ACCOUNTING PROBLEM

by SHA
(ATLANTA GA )











































ANDREW WELLS IS A PAINTING CONTRACTOR WHO SPECIALIZE IN PAINTING COMMERCIAL BUILDINGS. AT THE BEGINING OF JUNE, HIS FIRM'S FINANCIAL RECORDS SHOW THE FOLLOWING ASSETS, LIABILITIES, AND OWNER'S EQUITY.

CASH $31,760 ACCOUNTS PAYABLE $8,200 ACCOUNTS RECEIVABLE $14,400 ANDREW WELLS, CAPITAL $101,700 OFFICE FURNITURE $33,800 REVENUE $42,780 AUTO $54,100 EXPENSES $18,620


1. PERFORMED SERVICES FOR$5,350 ON CREDIT.
2.PAID $1,200 IN CASH FOR NEW OFICE CHAIRS.
3.RECEIVED $5,600 IN CASH FROM CREDIT CLIENTS.
4. PAID $640 IN CASH FOR TELEPHONE SERVICE.
5. SENT A CHECK FOR $1,500 IN PARTIAL PAYMENT OF THE AMOUNT DUE CREDITORS.
6. PAID SALARIES OF $7,800 IN CASH
7. SENT A CHECK FOR $700 TO PAY ELECTRIC BILL
8. PERFORMED SERVICES FOR $9,700 IN CASH
9.PAID $1,840 IN CASH FOR AUTO REPAIRS
10. PERFORMED SERVICES FOR $8,900 ON ACCOUNT.

ANALYZE WHAT IS THE AMOUNT OF TOTAL ASSETS AFTER ALL TRANSACTIONS HAVE BEEN RECORDED?

Comments for TOTAL ASSETS - ACCOUNTING PROBLEM

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May 06, 2012
Balance Sheet
by: Staff

Part I
Question:
by SHA
(ATLANTA GA)

ANDREW WELLS IS A PAINTING CONTRACTOR WHO SPECIALIZES IN PAINTING COMMERCIAL BUILDINGS. AT THE BEGINING OF JUNE, HIS FIRM'S FINANCIAL RECORDS SHOW THE FOLLOWING ASSETS, LIABILITIES, AND OWNER'S EQUITY.

CASH $31,760 ACCOUNTS PAYABLE $8,200 ACCOUNTS RECEIVABLE $14,400 ANDREW WELLS, CAPITAL $101,700 OFFICE FURNITURE $33,800 REVENUE $42,780 AUTO $54,100 EXPENSES $18,620


1. PERFORMED SERVICES FOR$5,350 ON CREDIT.
2.PAID $1,200 IN CASH FOR NEW OFICE CHAIRS.
3.RECEIVED $5,600 IN CASH FROM CREDIT CLIENTS.
4. PAID $640 IN CASH FOR TELEPHONE SERVICE.
5. SENT A CHECK FOR $1,500 IN PARTIAL PAYMENT OF THE AMOUNT DUE CREDITORS.
6. PAID SALARIES OF $7,800 IN CASH
7. SENT A CHECK FOR $700 TO PAY ELECTRIC BILL
8. PERFORMED SERVICES FOR $9,700 IN CASH
9.PAID $1,840 IN CASH FOR AUTO REPAIRS
10. PERFORMED SERVICES FOR $8,900 ON ACCOUNT.

ANALYZE WHAT IS THE AMOUNT OF TOTAL ASSETS AFTER ALL TRANSACTIONS HAVE BEEN RECORDED?

Answer:




Assets = Liabilities + Shareholders' Equity


Balance Sheet Summary:

**Beginning of June

Assets = Liabilities + Shareholders’ Equity

$134,060 (Assets) = $134,060 (Liabilities + Shareholders’ Equity)


$31,760 (cash) + $14,400 (Accounts Receivable) + $87,900 (Property, Plant, & Equip: $33,800 - office furniture & $54,100 – auto)

=

$8,200 (accounts payable) + $101,700 (owner’s equity) + $24,160 (retained earnings = 42780 - 18620)


$134,060 = $134,060





**After Transactions

Assets = Liabilities + Shareholders’ Equity

$147,370 (Assets) = $147,370 (Liabilities + Shareholders’ Equity)


$33,380 (cash) + $23,050 (Accounts Receivable) + $90,940 (Property, Plant, & Equip)

=

( $2,440) (accounts payable) + $101,700 (owner’s equity) + $48,110 (retained earnings)


$147,370 = $147,370

-------------------------------------------------------------------------------


May 06, 2012
Balance Sheet
by: Staff


-------------------------------------------------------------------------------

Part II



**Balance Sheet at the Beginning of June


            Assets

Current Assets


Cash

$31,760      Balance, Beginning of June


Accounts Receivable

$14,400      Balance, Beginning of June

Inventory
Prepaid Expenses

Property, Plant, & Equip

$33,800     - OFFICE FURNITURE, Balance, Beginning of June
$54,100     -AUTO, Balance, Beginning of June


Accumulated Depreciation

------------

$134,060      Total Assets as of the Beginning of June



            Liabilities & Owner’s Equity

Accounts Payable
$8,200      Beginning Balance

Short Term Notes Payable

Long Term Notes Payable

Owner’s Equity

$101,700      - Balance, Beginning of June

Capital Stock

Retained Earnings
$24,160      (retained earnings at Beginning of June = $42,780 - 18620)

------------

$134,060      Total Liabilities & Shareholders’ Equity as of the Beginning of June








-------------------------------------------------------------------------------

** Balance Sheet After Transactions



            Assets

Current Assets


Cash

$31,760      Balance, Beginning of June

+9,700 (1)       - PERFORMED SERVICES FOR for CASH
+5,600 (2)       -RECEIVED IN CASH FROM CREDIT CLIENTS.
- 1,200 (3)       -PAID CASH FOR NEW OFICE CHAIRS.
- 1,840 (4)       - PAID CASH FOR AUTO REPAIRS
- 640 (5)       -PAID CASH FOR TELEPHONE SERVICE.
- 1,500 (6)       -SENT A CHECK FOR PARTIAL PAYMENT OF THE AMOUNT DUE CREDITORS
- 7,800 (7)       -PAID SALARIES IN CASH
- 700 (8)       -SENT A CHECK TO PAY ELECTRIC BILL

$ 33,380      Cash Balance, After Transactions





Accounts Receivable

$14,400      Balance, Beginning of June

+$5,350 (9)       -PERFORMED SERVICES FOR ON CREDIT.
- $5,600 (2)       -RECEIVED IN CASH FROM CREDIT CLIENTS.
+ 8,900 (10)       -PERFORMED SERVICES ON ACCOUNT.

$ 23,050      Accounts Receivable Balance, After Transactions


-------------------------------------------------------------------------------


May 06, 2012
Balance Sheet
by: Staff


-------------------------------------------------------------------------------

Part III



Inventory
Prepaid Expenses

Property, Plant, & Equip

(see office & auto)       Balance, Beginning of June


$33,800      - OFFICE FURNITURE $33,800, Balance, Beginning of June
$54,100      -AUTO $54,100, Balance, Beginning of June


+ 1,200 (3)       -PAID $1,200 IN CASH FOR NEW OFICE CHAIRS.
+ 1,840 (4)       - PAID $1,840 IN CASH FOR AUTO REPAIRS

$ 90,940      Property, Plant, & Equip Balance, After Transactions


Accumulated Depreciation


------------

$ 147,370      Total Assets After Transactions



            Liabilities & Owner’s Equity

Accounts Payable
$8,200      Beginning Balance

Accrued Expenses Payable
- 640 (5)       -PAID FOR TELEPHONE SERVICE.
- 1,500 (6)       -SENT A CHECK FOR PARTIAL PAYMENT OF THE AMOUNT DUE CREDITORS
- 7,800 (7)       -PAID SALARIES OF IN CASH
- 700 (8)       -SENT A CHECK FOR TO PAY ELECTRIC BILL

( $2,440)       Accounts Payable Balance, After Transactions


Short Term Notes Payable

Long Term Notes Payable

Owner’s Equity

$101,700      - Balance, Beginning of June

Capital Stock

Retained Earnings

$24,160       (retained earnings at Beginning of June = $42,780 - 18620)
+ 9,700 (1)       - PERFORMED SERVICES for CASH
+$5,350 (9)       -PERFORMED SERVICES FOR CREDIT.
+ 8,900 (10)       -PERFORMED SERVICES ON ACCOUNT.

$48,110      Retained Earnings Balance, After Transactions




------------

$ 147,370      Total Liabilities & Shareholders’ Equity After Transactions











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