Topic:
1.
Mark Zukarbarg
ID:
2.
Nikson
ID:
3.
Addams
ID:
4.
Paul
ID:
5.
Newton
ID:
1. How to collect data from practical field
2. How to convert raw data to Transactions
3. How to convert transactions to Accounting Equation
4. How to convert Accounting Equation to Financial
Statements according to IAS 1 and BAS 1
Accounting Equation
Barone’s Repair Shop was started on May 1 by Nancy. Prepare a tabular
analysis of the following transactions for the month of May.
1. Invested $10,000 cash to start the repair shop.
Assets
Cash
1. +10,000
Liabilities
Accounts
Accounts
+ Receivable + Equipment = Payable
Equity
Barone,
+ Capital
+10,000
Investment
Accounting Equation
2. Purchased equipment for $5,000 cash.
Liabilities
Assets
Cash
Accounts
Accounts
+ Receivable + Equipment = Payable
1. +10,000
2. -5,000
Equity
Barone,
+ Capital
+10,000
+5,000
Investment
Accounting Equation
3. Paid $400 cash for May office rent.
Liabilities
Assets
Cash
Accounts
Accounts
+ Receivable + Equipment = Payable
1. +10,000
2. -5,000
3.
-400
Equity
Barone,
+ Capital
+10,000
Investment
+5,000
-400
Expense
Accounting Equation
4. Received $5,100 from customers for repair service.
Liabilities
Assets
Cash
Accounts
Accounts
+ Receivable + Equipment = Payable
1. +10,000
2. -5,000
3.
4.
-400
+5,100
Equity
Barone,
+ Capital
+10,000
Investment
+5,000
-400
+5,100
Expense
Revenue
Accounting Equation
5. Withdrew $1,000 cash for personal use.
Liabilities
Assets
Cash
Accounts
Accounts
+ Receivable + Equipment = Payable
1. +10,000
2. -5,000
Equity
Barone,
+ Capital
+10,000
Investment
+5,000
3.
4.
-400
+5,100
-400
+5,100
Expense
Revenue
5.
-1,000
-1,000
Drawings
Accounting Equation
6. Paid part-time employee salaries of $2,000.
Liabilities
Assets
Cash
Accounts
Accounts
+ Receivable + Equipment = Payable
1. +10,000
2. -5,000
3.
4.
Equity
Barone,
+ Capital
+10,000
Investment
+5,000
-400
+5,100
-400
+5,100
Expense
Revenue
5. -1,000
6. -2,000
-1,000
-2,000
Drawings
Expense
Accounting Equation
7. Incurred $250 of advertising costs, on account.
Liabilities
Assets
Cash
Accounts
Accounts
+ Receivable + Equipment = Payable
1. +10,000
2. -5,000
3.
4.
Equity
Barone,
+ Capital
+10,000
Investment
+5,000
-400
+5,100
-400
+5,100
Expense
Revenue
5. -1,000
6. -2,000
-1,000
-2,000
Drawings
Expense
7.
+250
-250
Expense
Accounting Equation
8. Provided $750 of repair services on account.
Liabilities
Assets
Cash
Accounts
Accounts
+ Receivable + Equipment = Payable
1. +10,000
Barone,
+ Capital
+10,000
2. -5,000
3.
4.
Equity
Investment
+5,000
-400
+5,100
-400
+5,100
Expense
Revenue
5. -1,000
6. -2,000
-1,000
-2,000
Drawings
Expense
7.
8.
+250
+750
-250
+750
Expense
Revenue
Accounting Equation
9. Collected $120 cash for services previously billed.
Liabilities
Assets
Cash
Accounts
Accounts
+ Receivable + Equipment = Payable
Equity
Barone,
+ Capital
1. +10,000
+10,000
2. -5,000
3.
4.
Investment
+5,000
-400
+5,100
-400
+5,100
Expense
Revenue
5. -1,000
6. -2,000
-1,000
-2,000
Drawings
Expense
7.
8.
9.
+250
+750
+120
6,820 +
-120
630 +
5,000 =
250 +
-250
+750
12,200
Expense
Revenue
Financial Statements
Companies prepare four financial statements from the summarized
accounting data:
Income
Statement
Owner’s
Equity
Statement
Balance
Sheet
Statement
of
Cash Flows
Financial Statements
Income Statement
Barone’s Repair Shop
Income Statement
For the Month Ended May 31, 2008
Revenues:
Service revenue
$ 5,850
Expenses:
Salary expense
Rent expense
Advertising expense
Total expenses
Net income
2,000
400
250
2,650
$ 3,200
Financial Statements
Income Statement
Owner’s Equity
Statement
Barone’s Repair Shop
Barone’s Repair Shop
Income Statement
Owner's Equity Statement
For the Month Ended May 31, 2008
For the Month Ended May 31, 2008
Revenues:
Service revenue
$ 5,850
Expenses:
Salary expense
Rent expense
Advertising expense
Total expenses
Net income
2,000
400
250
2,650
$ 3,200
Barone's, Capital May 1
$
-
Add: Investment
10,000
Net income
3,200
Less: Drawings
Barone's, Capital May 31
13,200
1,000
$12,200
Financial Statements
Owner’s Equity Statement
Barone’s Repair Shop
Owner's Equity Statement
For the Month Ended May 31, 2008
Barone's, Capital May 1
Add: Investment
Net income
Less: Drawings
Barone's, Capital May 31
$
-
10,000
3,200
13,200
1,000
$12,200
Financial Statements
Balance Sheet
Barone’s Repair Shop
Barone’s Repair Shop
Balance Sheet
Owner's Equity Statement
May 31, 2008
For the Month Ended May 31, 2008
Assets
Cash
$ 6,820
Accounts receivable
630
Equipment
5,000
Total assets
$12,450
Liabilities
Accounts payable
Barone's, Capital May 1
Add: Investment
Net income
Less: Drawings
$
250
Owner's Equity
Barone's, capital
Owners’ Equity
Statement
12,200
Total liab. & equity $12,450
Barone's, Capital May 31
$
10,000
3,200
13,200
1,000
$ 12,200
Financial Statements
Balance Sheet
Barone’s Repair Shop
Balance Sheet
May 31, 2008
Assets
Cash
Accounts receivable
Equipment
Total assets
$ 6,820
630
5,000
$12,450
Liabilities
Accounts payable
$
250
Owner's Equity
Barone's, capital
Total liab. & equity
12,200
$12,450
Financial Statements
Balance Sheet
Statement of Cash Flows
Barone’s Repair Shop
Statement of Cash Flows
Barone’s Repair Shop
For the Month Ended May 31, 2008
Balance Sheet
Cash flow from operating activities
May 31, 2008
Assets
Cash
$ 6,820
Accounts receivable
630
Equipment
5,000
Total assets
$12,450
Liabilities
Accounts payable
$
250
Owner's Equity
Barone's, capital
12,200
Total liab. & equity $12,450
Cash receipts from revenues
Cash paid for expenses
Cash provided by operations
$ 5,220
(2,400)
2,820
Cash flow from investing activitites
Purchase of equipment
(5,000)
Cash flow from financing activities
Investment by owners
Drawings by owners
Cash provided by financing
10,000
(1,000)
9,000
Net increase in cash
6,820
Cash balance, May 1
-
Cash balance, May 31
$ 6,820
Financial Statements
Statement of Cash Flows
Barone’s Repair Shop
Statement of Cash Flows
For the Month Ended May 31, 2008
Cash flow from operating activities
Cash receipts from customers
Cash paid for expenses
Cash provided by operations
$ 5,220
(2,400)
2,820
Cash flow from investing activities
Purchase of equipment
(5,000)
Cash flow from financing activities
Investment by owners
Drawings by owners
Cash provided by financing
10,000
(1,000)
9,000
Net increase in cash
6,820
Cash balance, May 1
-
Cash balance, May 31
$ 6,820