The paper 'Accounting Principles' is a great example of a Finance and Accounting Assignment. Depositing the inherited cash of $40,000 will increase the cash at the bank by $40,000. The owner’ s equity will also increase by a similar amount. This will leave the accounting equation of Future Designs balanced. The receipt of cash of $1,400 from the services performed for a client will increase the cash at the bank hence the left-hand side of the equation will increase by $1,400 while the right hand of the accounting equation will not change (Fess and Warren, 2004).
This will leave the accounting equation of Future Designs unbalanced. Paying of the beginning balance of accounts payable will decrease the accounts payable to zero while the cash at the bank will reduce by $16,000. This will leave the accounting equation of Future Designs balanced. Requirement a) Omar IT Consultant Work Sheet Month Ended 30 June 2013 ACCOUNT TITLE TRIAL BALANCE ($) Dr. ADJUSTMENTS ($) Cr. ADJUSTED TRIAL BALANCE ($) Dr. INCOME STATEMENT ($) Cr. BALANCE SHEET ($) Dr. Cash at bank 3,800 3,800 3,800 Accounts receivable 15,560 15,560 15,560 Prepaid rent 1,290 1,050 2,340 1,050 Supplies 20,900 5,340 15,560 15,560 Equipment 15,350 15,350 15,350 Accumulated depreciation – equipment 12,800 370 13,170 13,170 Building 89,900 89,900 89,900 Accumulated depreciation – building 28,600 130 28,730 28,730 Accounts payable 4,240 4,240 4,240 Salary payable 460 460 460 Unearned service revenue 8,900 2,400 6,500 6,500 Omar, capital 71,920 71,920 71,920 Omar, Drawings 4,800 4,800 4,800 Service revenue 27,300 2,400 29,700 29,700 Salary expense 2,160 460 2,620 2,620 Rent expense 240 240 240 Depreciation expense - equipment 370 370 370 Depreciation expense - building 130 130 130 Supplies expense 5,430 5,430 5,430 Total 153,760 153,760 155,600 155,600 Net profit/loss 21,500 Total 146,020 146,020 Requirement b) General Journal Page 7 DATE ACCOUNTS AND EXPLANATIONS POST. REF. DEBIT CREDIT June 30 Unearned service revenue GL 2,400 Service revenue GL 2,400 Rent expense GL 240 Prepaid rent GL 240 Supplies expense GL 5,340 Supplies GL 5,340 Depreciation on equipment GL 370 Accumulated Depreciation on equipment GL 370 Depreciation on building GL 130 Accumulated Depreciation on building GL 130 Salary expense GL 460 Salary payable GL 460 Requirement c) General Journal Page 7 DATE ACCOUNTS AND EXPLANATIONS POST. REF. DEBIT CREDIT June 30 Cash at bank GL 3,800 Bal c/d 3,800 Accounts receivable GL 15,560 Bal c/d 15,560 Prepaid rent GL 1,050 Profit & loss GL 1,050 Supplies GL 15,560 Balance c/d 15,560 Equipment GL 15,350 Accumulated depreciation – equipment GL 13,170 Balance c/d 2,180 Building GL 89,900 Accumulated depreciation – Building GL 28,730 Balance c/d 61,170 Accounts payable GL 4,240 Balance c/d 4,240 Salary expense GL 460 Salary payable GL 460 Profit and loss GL 6,500 Unearned service revenue GL 6,500 Omar, capital GL 71,920 Balance c/d 71,920 Omar, Drawings GL 4,800 Balance c/d 4,800 Profit and loss GL 29,700 Service revenue GL 29,700 Salary expense GL 2,620 Profit and loss GL 2,620 Rent expense GL 240 Profit and loss GL 240 Depreciation expense - equipment GL 370 Profit and loss GL 370 Depreciation expense - building GL 130 Profit and loss GL 130 Supplies expense GL 5,430 Profit and loss GL 5,430 Requirement d) Julia Roberts, CA Trial Balance As at 30 April 2013 ACCOUNT DEBIT CREDIT Omar IT Consultant Trial Balance As at 30 June 2013 ACCOUNT DEBIT CREDIT Cash at bank 3,800 Accounts receivable 15,560 Prepaid rent 2,340 Supplies 15,560 Equipment 15,350 Accumulated depreciation – equipment 13,170 Building 89,900 Accumulated depreciation – building 28,730 Accounts payable 4,240 Salary payable 460 Unearned service revenue 6,500 Omar, capital 71,920 Omar, Drawings 4,800 Service revenue 29,700 Salary expense 2,620 Rent expense 240 Depreciation expense - equipment Depreciation expense - building Supplies expense 5,430 Total 155,600 155,600
References
Fess, E. and Warren, C., 2004. Accounting principles. Canada: Southwestern Company.
Horngren, C. T., & Harrison, W. T., 2009. Accounting (7th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.