From The Following Trial Balance, Identify Which Statement E

From The Following Trial Balance Identify Which Statement Each Tit

From the following trial balance, identify which statement each title will appear on: a. Income statement (IS) b. Statement of owner’s equity (OE) c. Balance sheet (BS) Bradford Co. Trial Balance Nov. 30, 201X Debits Credits A. Cash 600 B. Computer 100 C. Computer Equipment 1,000 D. Accounts Payable 800 E. L. Bradford, Capital 200 F. L. Bradford, Withdrawals 500 G. Legal Fees Earned 1,500 H. Consulting Fees Earned 300 I. Wage Expense 200 J. Supplies Expense 250 K. Internet Advertising Expense 150 Totals 2,800 2., SANACHEZ COMPUTER CENTER The Sanchez Computer Center created its chart of accounts as follows: Chart of Accounts as of July 1, 201X Assets Revenue 1000 Cash 4000 Service Revenue 1020 Accounts Receivable Expenses 1030 Supplies 5010 Advertising Expense 1080 Computer Shop Equipment 5020 Rent Expense 1090 Office Equipment 5030 Utilities Expense Liabilities 5040 Phone Expense 2000 Accounts Payable 5050 Supplies Expense Owner’s Equity 5060 Insurance Expense 3000 Freedman, Capital 5070 Postage Expense 3010 Freedman, Withdrawals You will use this chart of accounts to complete the continuing problem. The following problem continues. The balances as of July 31 have been brought forward in the working papers that accompany this text. Tasks a. Set up T accounts in a ledger. b. Record transactions k through s in the appropriate T accounts. c. Foot and take the balances of the T accounts where appropriate. d. Prepare a trial balance at the end of August. e. Prepare from the trial balance an income statement, statement of owner’s equity, and a balance sheet for the two months ending with August 31, 201X. o Received the phone bill for the month of July, $155. o Paid $150 (check #8099) for insurance for the month. o Paid $200 (check #8100) of the amount due from transaction d in Chapter 1. o Paid advertising expense for the month, $1,400 (check #8101). o Billed a client (Jeannine Sparks) for services rendered, $850. o Collected $900 for services rendered. o Paid the electric bill in full for the month of July (check #8102, transaction h, Chapter 1). o Paid cash (check #8103) for $50 in stamps. o Purchased $200 worth of supplies from Computer Connection on credit. 3. The chart of accounts of Annis’ Delivery Service is as follows: Cash, 111; Accounts Receivable, 112; Office Equipment, 121; Delivery Trucks, 122; Accounts Payable, 211; Avery Annis, Capital, 311; Avery Annis, Withdrawals, 312; Delivery Fees Earned, 411; Advertising Expense, 511; Gas Expense, 512; Salaries Expense, 513; and Telephone Expense, 514. Annis’ Delivery Service completed the following transactions during the month of August: Transaction A: Avery invested $17,000 in the delivery service from her personal savings account. Transaction B: Bought delivery trucks on account, $11,000. Transaction C: Bought office equipment for cash, $600. Transaction D: Paid advertising expense, $350. Transaction E: Collected cash for delivery services rendered, $3,500. Transaction F: Paid drivers’ salaries, $900. Transaction G: Paid gas expense for trucks, $1,700. Transaction H: Performed delivery services for a customer on account, $1,600. Transaction I: Telephone expense due but unpaid, $600. Transaction J: Received $400 as partial payment of transaction H. Transaction K: Avery withdrew cash for personal use, $250. As Avery’s newly hired accountant, you must perform the following: a. The T accounts in the ledger have been set up for you. Record transactions in the T accounts. (Place the letter of the transaction next to the entry.) b. Foot the T accounts where appropriate. c. Prepare a trial balance at the end of August. d. Prepare from the trial balance, in proper form, (a) an income statement for the month of August, (b) a statement of owner’s equity, and (c) a balance sheet as of August 31, 201X. 4. From the trial balance of Gail Lucas, Attorney-at-Law (below) prepare a. An income statement for the month of May b. A statement of owner’s equity for the month ended May 31, and c. A balance sheet at May 31, 201X. Gail Lucas, Attorney-At-Law Trial Balance May 31, 201X Debits Credits A. Cash 6,000.00 B. Accounts Receivable 750.00 C. Office Equipment 1,250.00 D. Accounts Payable 6,200.00 E. Sales Payable 770.00 F. G. Lucas, Capital 1,180.00 G. G. Lucas, Withdrawals 800.00 H. Revenue from Legal Fees 1,800.00 I. Utilities Expense 150.00 J. Rent Expense 500.00 K. Salaries Expense 500.00 Totals 9,950.00 9,950.00 a. Set up an expanded accounting equation spreadsheet using the following accounts: Assets Liabilities Owner’s Equity Cash Supplies Computer Shop Equipment Office Equipment Accounts Payable Freedman, Capital Freedman, Withdrawal Service Revenue Expenses (notate type) b. Analyze and record each transaction in the expanded accounting equation. c. Prepare the financial statements ending July 31 for Sanchez Computer Center. 2. On July 1, 201X, Tony Freedman decided to begin his own computer service business. He named the business the Sanchez Computer Center. During the first month Tony conducted the following business transactions. Record them into the basic accounting equation. a. Invested $4,500 of his savings into the business. b. Paid $1,200 (check #8095) for the computer from Multi Systems, Inc. c. Paid $600 (check #8096) for office equipment from Office Furniture, Inc. d. Set up a new account with Office Depot and purchased $250 in office supplies on credit. e. Paid July rent, $400 (check #8097). f. Repaired a system for a customer and collected $250. g. Collected $200 for system upgrade labor charge from a customer. h. Electric bill due but unpaid, $85. i. Collected $1,200 for services performed on Taylor Golf computers. j. Withdrew $100 (check #8098) to take his wife, Carol, out in celebration of opening the new business. 3. Mike Ackerman decided to open Mike’s Nail Spa. Mike completed the following transactions. Record them into the basic accounting equation. a. Invested $24,000 cash from his personal bank account into the business. b. Bought store equipment for cash, $3,700. c. Bought additional store equipment on account, $6,100. d. Paid $900 cash to partially reduce what was owed from transaction c. 4. From the following account balances, prepare in proper form for September (a) an income statement, (b) a statement of owner’s equity, and (c) a balance sheet for Frechette Realty. Cash $7,050 S. Frechette, Withdrawals $800 Accounts Receivable 1,060 Professional Fees 4,000 Office Equipment 6,700 Salaries Expense 400 Accounts Payable 2,000 Utilities Expense 360 S. Frechette, Capital, September 1, 201X 10,770 Rent Expense 400

Paper For Above instruction

The provided content contains multiple overlapping and complex accounting tasks involving trial balances, financial statements, and transaction analyses for different businesses. The core assignment involves classifying various financial statement titles based on given trial balances and creating financial statements such as income statements, balance sheets, and statements of owner’s equity based on specified transactions and balances. This response will focus specifically on the initial classification of items from a trial balance and the subsequent creation of complete financial statements for given businesses, ensuring clarity and academic rigor throughout.

Identification of Financial Statement Placement

From the trial balance of Bradford Co., the classification of each account into the appropriate financial statement is essential for understanding the financial picture of the company. How accounts are classified depends on their nature—whether they are income, expense, asset, liability, or owner’s equity accounts. The accounts in question include Cash, Computer, Computer Equipment, Accounts Payable, L. Bradford, Capital, L. Bradford, Withdrawals, Legal Fees Earned, Consulting Fees Earned, Wage Expense, Supplies Expense, and Internet Advertising Expense.

Most asset accounts like Cash, Computer, and Computer Equipment appear on the balance sheet (BS). Accounts payable and owner’s capital and withdrawals are also balance sheet items. Income accounts such as Legal Fees Earned and Consulting Fees Earned, and expenses including Wage Expense, Supplies Expense, and Internet Advertising Expense, are classified under the income statement (IS).

Specifically:

• Assets (Cash, Computer, Computer Equipment) and liabilities (Accounts Payable) appear on the balance sheet.
• Owner's equity accounts (L. Bradford, Capital; L. Bradford, Withdrawals) also appear on the balance sheet.
• Revenues (Legal Fees Earned, Consulting Fees Earned) are on the income statement.
• Expenses (Wage Expense, Supplies Expense, Internet Advertising Expense) are on the income statement.

Similarly, with the Sanchez Computer Center, the chart of accounts facilitates the grouping of accounts into financial statements. The revenue accounts (Service Revenue), expenses (Advertising Expense, Rent Expense, Utilities Expense, Phone Expense, Insurance Expense, Postage Expense), assets (Cash, Accounts Receivable, Supplies, Computer Shop Equipment, Office Equipment), liabilities (Accounts Payable), and owner’s equity (Freedman Capital, Withdrawals) are categorized accordingly for preparing the financial statements.

Analysis of Transactions and Their Accounting Impact

The transactions outlined for Sanchez Computer Center from July 1 through August 31 involve numerous typical business activities: investments, purchase of equipment, expenses paid, revenues earned, and collections from clients. These are input into T-accounts to facilitate ledger reconciliation, trial balance preparation, and subsequent financial statements.

For example, Tony Freedman's initial investment increases assets (cash) and owner’s equity (capital). Purchasing equipment decreases cash but increases assets. Paying expenses reduces cash and increases expenses in the income statement. Revenue from services increases assets and revenue accounts, directly impacting net income.

The process includes:

1. Setting up T-accounts for all relevant accounts.
2. Recording each transaction in the appropriate T-accounts, ensuring debit and credit entries are accurate per transaction details.
3. Footing (summing) the T-accounts to find the balances.
4. Preparing a trial balance to verify debits equal credits.
5. Using the trial balance data to compile the financial statements.

This systematic approach ensures accuracy and compliance with accounting principles.

Preparation of Financial Statements

Once the trial balance is prepared, the figures are used to create the financial reports: income statement, statement of owner’s equity, and balance sheet, following standard accounting formats. The income statement captures revenues and expenses to calculate net income. The statement of owner’s equity adjusts beginning capital for investments, withdrawals, and net income, resulting in ending capital. The balance sheet summarizes assets, liabilities, and owner’s equity—ensuring the accounting equation remains balanced.

For Gail Lucas, the process involves creating these statements based on her trial balance, providing insights into her law firm’s financial health for May. This involves calculating net income, updating owner’s equity, and listing assets and liabilities appropriately.

Conclusion

Accurate classification of accounts and systematic recording of transactions are fundamental for reliable financial reporting. The tasks outlined demonstrate the application of core accounting principles—classification, journalizing, ledger posting, trial balance preparation, and financial statement creation—to ensure transparency and compliance with accounting standards. Proper execution of these tasks enables stakeholders to make informed decisions and accurately assess the financial performance and position of each business.

References

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