Prepare a statement of owner”s equity for August.


Question Description:

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After several months of planning, Jasmine Worthy started a haircutting business called Expressions. The following events occurred during its first month of business. a. On August 1, Worthy invested $3,000 cash and $15,000 of equipment in Expressions. b. On August 2, Expressions paid $600 cash for furniture for the shop. c. On August 3, Expressions paid $500 cash to rent space in a strip mall for August. d. On August 4, it purchased $1,200 of equipment on credit for the shop (using a long-term note payable). e. On August 5, Expressions opened for business. Cash received from haircutting services in the first week and a half of business (ended August 15) was $825. f. On August 15, it provided $100 of haircutting services on account. g. On August 17, it received a $100 check for services previously rendered on account. h. On August 17, it paid $125 cash to an assistant for hours worked during the grand opening. i. Cash received from services provided during the second half of August was $930. j. On August 31, it paid a $400 installment toward principal on the note payable entered into on August 4. k. On August 31, Worthy made a $900 cash withdrawal from the company for personal use. Required 1. Arrange the following asset, liability, and equity titles in a table similar to the one Cash; Accounts Receivable; Furniture; Store Equipment; Note Payable; J. Worthy, Capital; J. Worthy, Withdrawals; Revenues; and Expenses. Show the effects of each transaction using the accounting equation. 2. Prepare an income statement for August. 3. Prepare a statement of owner’s equity for August. 4. Prepare a balance sheet as of August 31. 5. Prepare a statement of cash flows for August. 6. Determine the return on assets ratio for August.

Answer

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