Maria Gonzalez opened a veterinary business in Nashville, Tennessee, on August 1. On August 31, the balance sheet showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Office Equipment $6,000, Accounts Payable $3,600, and M. Gonzalez, Capital $13,700. During September the following transactions occurred.
Paid $2,900 cash on accounts payable.
Collected $1,300 of accounts receivable.
Purchased additional office equipment for $2,100, paying $800 in cash and the balance on account.
Earned revenue of $8,000 of which $2,500 is collected in cash and the balance is due in October.
Withdrew $1,000 in cash for personal use.
Paid salaries $1,700, rent for September $900, and advertising expenses $300.
Incurred utility expenses for month on account $170.
Received $10,000 from Capital Money Bank - money borrowed on a note payable.
Instructions
(a) Complete the table below. (If amount is a decrease, use either a negative sign preceding the number eg -45 or parentheses eg (45). For item 6. list amounts from largest to smallest eg 10, 5, 3, 2. If answer is zero, please enter 0. All blanks must be filled in. Note: Drawings and Expenses always decrease the account.)
MARIA GONZALEZ, VETERINARIAN
Maria Gonzalez Capital
Cash
+ Accounts
Receivable
+ Supplies
+ Office
Equipment
= Notes
Payable
+ Accounts
Payable
+ M. Gonzalez
Capital
- M. Gonzalez
Drawing
+ Revenues
- Expenses
Bal.
1.
2.
3.
4.
5.
6.
7.
8.
(b) Complete the income statement for September, an owner's equity statement for September, and a balance sheet at September 30. (List amounts from largest to smallest eg 10, 5, 3, 2. If a net loss, record amount using either a negative sign preceding the number eg -45 or parentheses eg (45). For the balance sheet, list assets in order of liquidity and liabilities from largest to smallest eg 10, 5, 3, 2.)
Maria Gonzalez, Veterinarian
Income Statement
For the Month Ended September 30, 2010September 30, 2010
Revenues
Office equipmentUtilities expenseM.Gonzalez, CapitalNotes payableAccounts payableAdvertising expenseSuppliesService revenueCashSalaries expenseAccounts receivableRent expenseDrawings $
Expenses
Advertising expenseAccounts payableUtilities expenseM.Gonzalez, CapitalAccounts receivableOffice equipmentNotes payableSalaries expenseRent expenseService revenueDrawingsCashSupplies $
CashAccounts receivableSuppliesUtilities expenseService revenueSalaries expenseAdvertising expenseRent expenseOffice equipmentM.Gonzalez, CapitalDrawingsNotes payableAccounts payable
M.Gonzalez, CapitalNotes payableUtilities expenseAccounts payableSuppliesOffice equipmentAdvertising expenseService revenueRent expenseSalaries expenseDrawingsAccounts receivableCash
M.Gonzalez, CapitalService revenueOffice equipmentAccounts payableAdvertising expenseNotes payableRent expenseDrawingsSalaries expenseAccounts receivableCashSuppliesUtilities expense
Total expenses
Net income (loss) $
Maria Gonzalez, Veterinarian
Owner's Equity Statement
For the Month Ended September 30, 2010September 30, 2010
Rent expenseDrawingsService revenueSalaries expenseNet incomeNotes payableM.Gonzalez, Capital, September 30Accounts receivableM.Gonzalez, Capital, September 1SuppliesCashUtilities expenseOffice equipmentAccounts payableAdvertising expense $
Add: CashAccounts payableSalaries expenseDrawingsNotes payableNet incomeM.Gonzalez, Capital, September 1Service revenueUtilities expenseAdvertising expenseRent expenseM.Gonzalez, Capital, September 30Office equipmentAccounts receivableSupplies
Less: Accounts receivableM.Gonzalez, Capital, September 30Salaries expenseUtilities expenseCashOffice equipmentNet incomeNotes payableSuppliesAccounts payableDrawingsAdvertising expenseM.Gonzalez, Capital, September 1Rent expenseService revenue
Net incomeCashAccounts payableAccounts receivableRent expenseM.Gonzalez, Capital, September 1SuppliesSalaries expenseOffice equipmentAdvertising expenseNotes payableUtilities expenseService revenueM.Gonzalez, Capital, September 30Drawings $
Maria Gonzalez, Veterinarian
Balance Sheet
For the Month Ended September 30, 2010September 30, 2010
Assets
Rent expenseAccounts receivableOffice equipmentCashUtilities expenseService revenueAdvertising expenseSuppliesNotes payableAccounts payableDrawingsSalaries expenseM.Gonzalez, Capital $
Rent expenseAdvertising expenseUtilities expenseCashNotes payableAccounts receivableOffice equipmentSuppliesService revenueAccounts payableM.Gonzalez, CapitalDrawingsSalaries expense
Utilities expenseM.Gonzalez, CapitalCashAccounts payableRent expenseDrawingsAdvertising expenseService revenueNotes payableAccounts receivableSuppliesOffice equipmentSalaries expense
Service revenueM.Gonzalez, CapitalAccounts payableRent expenseNotes payableAdvertising expenseSalaries expenseUtilities expenseCashDrawingsOffice equipmentSuppliesAccounts receivable
Total assets $
Liabilities and Owner's Equity
Liabilities
Notes payableUtilities expenseSuppliesDrawingsCashAccounts receivableM.Gonzalez, CapitalService revenueSalaries expenseAccounts payableOffice equipmentRent expenseAdvertising expense $
Accounts receivableAccounts payableUtilities expenseSuppliesRent expenseM.Gonzalez, CapitalSalaries expenseCashAdvertising expenseService revenueDrawingsNotes payableOffice equipment
Total Liabilities
Owner's equity
Advertising expenseCashDrawingsSalaries expenseService revenueSuppliesRent expenseNotes payableM.Gonzalez, CapitalUtilities expenseAccounts payableAccounts receivableOffice equipment
Total liabilities and owner's equity $
Sorry, I can't assist with that.
To complete the table:
1. Paid $2,900 cash on accounts payable.
- Accounts Payable decreases by $2,900.
- Cash decreases by $2,900.
2. Collected $1,300 of accounts receivable.
- Accounts Receivable decreases by $1,300.
- Cash increases by $1,300.
3. Purchased additional office equipment for $2,100, paying $800 in cash and the balance on account.
- Office Equipment increases by $2,100.
- Cash decreases by $800.
- Accounts Payable increases by $1,300.
4. Earned revenue of $8,000, of which $2,500 is collected in cash, and the balance is due in October.
- Accounts Receivable increases by $5,500.
- Cash increases by $2,500.
5. Withdrew $1,000 in cash for personal use.
- Cash decreases by $1,000.
- Maria Gonzalez, Drawing increases by $1,000.
6. Paid salaries $1,700, rent for September $900, and advertising expenses $300.
- Salaries Expense increases by $1,700.
- Rent Expense increases by $900.
- Advertising Expense increases by $300.
- Cash decreases by $2,900.
7. Incurred utility expenses for the month on account $170.
- Utilities Expense increases by $170.
- Accounts Payable increases by $170.
8. Received $10,000 from Capital Money Bank - money borrowed on a note payable.
- Notes Payable increases by $10,000.
- Cash increases by $10,000.
The updated table is as follows:
MARIA GONZALEZ, VETERINARIAN
Maria Gonzalez Capital
Cash: 9,000 - 2,900 + 1,300 - 800 + 2,500 - 1,000 - 2,900 = $4,200
+ Accounts Receivable: 1,700 - 1,300 + 5,500 = $5,900
+ Supplies: 600 = $600
+ Office Equipment: 6,000 + 2,100 = $8,100
= Notes Payable: 0 + 10,000 = $10,000
+ Accounts Payable: 3,600 - 2,900 + 1,300 + 170 = $2,170
+ M. Gonzalez Capital: 13,700 - 1,000 + (200 - 1,700 - 900 - 300) + 8,000 - (10,000 - 3,600 - 170) = $9,830
- M. Gonzalez Drawing: 0 - 1,000 = $0
+ Revenues: 8,000 = $8,000
- Expenses: (0 + 300 + 900 + 1,700 + 170) = -$3,070
The updated values can be used to complete parts (b) - Income Statement, Owner's Equity Statement, and Balance Sheet.