Abe Factor opened a new accounting practice called X-Factor Accounting and completed these activities during March 2020: March 1 Invested $50,000 in cash and office equipment that had a fair value of $12,000. 1 Prepaid $9,000 cash for three months' rent for an office. 3 Made credit purchases of used office equipment for $6,000 and office supplies for $1, 200. 5 Completed work for a client and immediately received $6, 200 cash. 9 Completed a $4,000 project for a client, who will pay within 30 days. 11 Paid the account payable created on March 3. 15 Paid $3,000 cash for the annual premium on an insurance policy. 20 Received $1, 500 as partial payment for the work completed on March 9. 22 Placed an order with a supplier for $4,800 of supplies to be delivered April 7. They must be paid for within 15 days of being received. 23 Completed work for another client for $2,850 on credit. 27 Abe Factor withdrew $3,600 cash from the business to pay some personal expenses. 30 Purchased $650 of additional office supplies on credit. 31 Paid $860 for the month's utility bill. Prepare an income statement and statement of changes in equity for the month ended March 31, 2020, and a balance sheet at March 31, 2020.

Abe Factor opened a new accounting practice called X-Factor Accounting and completed these activities during March 2020: March 1 Invested $50,000 in cash and office equipment that had a fair value of $12,000. 1 Prepaid $9,000 cash for three months' rent for an office. 3 Made credit purchases of used office equipment for $6,000 and office supplies for $1, 200. 5 Completed work for a client and immediately received $6, 200 cash. 9 Completed a $4,000 project for a client, who will pay within 30 days. 11 Paid the account payable created on March 3. 15 Paid $3,000 cash for the annual premium on an insurance policy. 20 Received $1, 500 as partial payment for the work completed on March 9. 22 Placed an order with a supplier for $4,800 of supplies to be delivered April 7. They must be paid for within 15 days of being received. 23 Completed work for another client for $2,850 on credit. 27 Abe Factor withdrew $3,600 cash from the business to pay some personal expenses. 30 Purchased $650 of additional office supplies on credit. 31 Paid $860 for the month's utility bill. Prepare an income statement and statement of changes in equity for the month ended March 31, 2020, and a balance sheet at March 31, 2020.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 46P: Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and...

See similar textbooks

Similar questions

Abe Factor opened a new accounting practice called X-Factor Accounting and completed these activities during March 2020: March 1 Invested $50,000 in cash and office equipment that had a fair value of $12,000. 1 Prepaid $9,000 cash for three months’ rent for an office. 3 Made credit purchases of used office equipment for $6,000 and office supplies for $1,200. 5 Completed work for a client and immediately received $6,200 cash. 9 Completed a $4,000 project for a client, who will pay within 30 days. 11 Paid the account payable created on March 3. 15 Paid $3,000 cash for the annual premium on an insurance policy. 20 Received $1,500 as partial payment for the work completed on March 9. 22 Placed an order with a supplier for $4,800 of supplies to be delivered April 7. They must be paid for within 15 days of being received. 23 Completed work for another client for $2,850 on credit. 27 Abe Factor withdrew $3,600 cash from the business to pay some…
Abe Factor opened a new accounting practice called X-Factor Accounting and completed these activities during March 2020: March 1 Invested $50,000 in cash and office equipment that had a fair value of $12,000. 1 Prepaid $9,000 cash for three months' rent for an office. 3 Made credit purchases of used office equipment for $6,000 and office supplies for $1, 200. 5 Completed work for a client and immediately received $6, 200 cash. 9 Completed a $4,000 project for a client, who will pay within 30 days. 11 Paid the account payable created on March 3. 15 Paid $3, 000 cash for the annual premium on an insurance policy. 20 Received $1, 500 as partial payment for the work completed on March 9. 22 Placed an order with a supplier for $4,800 of supplies to be delivered April 7. They must be paid for within 15 days of being received. 23 Completed work for another client for $2,850 on credit. 27 Abe Factor withdrew $3,600 cash from the business to pay some personal expenses. 30 Purchased $650 of…
Carlos Young started an engineering firm called Young Engineering. He began operations in March 2020 and completed seven transactions, including his initial investment of $17,000 cash. After these transactions, the ledger included the following accounts with their normal balances: $ 26,660 Cash Office Supplies Prepaid Insurance Office Equipment Accounts Payable Carlos Young, Capital Carlos Young, Withdrawals Engineering Revenue Rent Expense 660 3, 200 16,500 16,500 17,000 3,740 24,000 6,740 Required: Prepare a trial balance for the business. YOUNG ENGINEERING Trial Balance March 31, 2020 Debit Credit
Julius Ceasar organized Eternal Images, a photography and portrait studio, on Oct. 1, 2020. The studio completed the following transactions during the month: Oct. 1 Deposited P350,000 in a bank account in the name of the business Oct. 3 Paid two month's rent in advance, P30,000 Oct. 5 Acquired photography equipment valued at P129,000. Oct.12 Purchased photography supplies on credit, P21,000. Oct.13 Received cash for previously unbilled portraits, P11,400. Oct.17 Billed customers for portraits, P22,500. Oct.19 Paid fifty percent of the supplies purchased on Oct. 12, P10,500. Oct.25 Paid electricity bill for Oct., P3,600 Oct.26 Paid the telephone bill for Oct., P2,100. Oct.28 Received payments from the customers billed on Oct. 17, P7500. Oct.29 Paid salaries to personnel, P12,000. Oct.30 Received an advance payment from a customer, P1,500. Oct.31 Withdrew P16,000 from the business for a personal…
Manny Gill is an entrepreneur who started West Secure, a business that provides a number of security guard services. West Secure incurred the following transactions during July 2020, its first month of operations: July 1 The owner, Manny Gill, invested $5,300 cash. 10 Purchased $2,800 worth of security equipment on credit. 12 Performed security services for a sold-out concert and received $10,000 cash from the client. 14 Paid for expenses; $3,800. 15 Completed security services for a graduation event and sent the client a bill for $1,650. 31 The owner withdrew $280 cash for personal use. Required: Record the journal entries for the month of July. Post the July journal entries into your general ledger accounts. Include the date next to each number posted. Determine the balances. Prepare a trial balance using the balances in your general ledger accounts. Prepare an income statement, statement of changes in equity, and…
A CPA prepares tax returns for clients and bills them after the work is completed. It usually takes two weeks of work to prepare the tax returns. It takes 30 days on average to receive payment from the clients. The CPA uses cash-basis accounting. The revenue should be recorded when the CPA: O A. receives payments from the clients O B. bills the clients. OC. starts working on the tax returns O D. completes working on the tax returns. Click to select your answer. 11-50nm 99+
Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.
Elizabeth Wong has strong problem solving skills and loves to work with people. After becoming a Certified Human Resources Professional (CHRP) and working for serval companies, she opened her own business, HR Solutions. She completed the following transactions during May 2020: May 1 Invested $78,000 in cash and office equipment that had a fair value of $51,000 in the business. 1 Prepaid $15,300 cash for three months rent for an office 2 Made credit purchases of office equipment for $25,500 and office supplies for $5,100 6 Completed a report on hiring solutions for a client and collected $8,300 cash 9 Completed a $16,300 project implementing a training program for a client, who will pay within 30 days 10 Paid half of the account payable created on May 2 19 Paid $7,800 cash for the annual premium on an insurance policy 22 Received $13,100 as partial payment for the work completed on May 9…
Elizabeth Wong has strong problem solving skills and loves to work with people. After becoming a Certified Human Resources Professional (CHRP) and working for serval companies, she opened her own business, HR Solutions. She completed the following transactions during May 2020: May 1 Invested $78,000 in cash and office equipment that had a fair value of $51,000 in the business. 1 Prepaid $15,300 cash for three months rent for an office 2 Made credit purchases of office equipment for $25,500 and office supplies for $5,100 6 Completed a report on hiring solutions for a client and collected $8,300 cash 9 Completed a $16,300 project implementing a training program for a client, who will pay within 30 days 10 Paid half of the account payable created on May 2 19 Paid $7,800 cash for the annual premium on an insurance policy 22 Received $13,100 as partial payment for the work completed on May 9…
Elizabeth Wong has strong problem solving skills and loves to work with people. After becoming a Certified Human Resources Professional (CHRP) and working for serval companies, she opened her own business, HR Solutions. She completed the following transactions during May 2020: May 1 Invested $78,000 in cash and office equipment that had a fair value of $51,000 in the business. 1 Prepaid $15,300 cash for three months rent for an office 2 Made credit purchases of office equipment for $25,500 and office supplies for $5,100 6 Completed a report on hiring solutions for a client and collected $8,300 cash 9 Completed a $16,300 project implementing a training program for a client, who will pay within 30 days 10 Paid half of the account payable created on May 2 19 Paid $7,800 cash for the annual premium on an insurance policy 22 Received $13,100 as partial payment for the work completed on May 9…
Bayoud has started a computer servicing center on May 1, 2021. Following are some events andtransactions that occurred in the month of May:May 1 Bayoud invested $7,000 cash in the business.3 Purchased $600 of supplies on account.5 Paid $125 to advertise in the County News.9 Received $4,000 cash for services performed.15 Received $5,400 for services to be performed in July.17 Paid $2,500 for employee salaries.20 Paid the one year’s rent in advance $1200.29 Purchased equipment for $4,200 on account.Instructions:Prepare the ledger for Cash account.
Bayoud has started a computer servicing center on May 1, 2021. Following are some events andtransactions that occurred in the month of May:May 1 Bayoud invested $7,000 cash in the business.3 Purchased $600 of supplies on account.5 Paid $125 to advertise in the County News.9 Received $4,000 cash for services performed.15 Received $5,400 for services to be performed in July.17 Paid $2,500 for employee salaries.20 Paid the one year’s rent in advance $1200.29 Purchased equipment for $4,200 on account.Instructions:(i) Show the tabular analysis of the above transactions. (ii) Give the necessary journals. (iii) Prepare the ledger for Cash account