AvaAva
PetrilloPetrillo
recently opened her own law office on
MarchMarch
?1, which she operates as a corporation. The name of the newentity is
AvaAva
PetrilloPetrillo?,
Attorney.
PetrilloPetrillo
experienced the following events during the organizing phase ofthe new business and its first month of? operation,
MarchMarch
20182018.
Some of the events were personal and did not affect the lawpractice. Others were business transactions and should be accountedfor by the business.
Mar.Mar.???1
Sold personal investment in Amazon?stock, which she had owned for several? years, receiving$ 33 comma 000$33,000
cash. 2
Deposited the$ 33 comma 000$33,000
cash from the sale of the Amazon stock in her personal bankaccount. 3
Deposited$ 60 comma 000$60,000
cash in a new business bank account titledAvaAva
PetrilloPetrillo?,
Attorney. The business issued common stock toPetrilloPetrillo.
5
Paid$ 450$450
cash for ink cartridges for the printer. 7
Purchased computer for the law?office, agreeing to pay the? account,$ 7 comma 000$7,000?,
within three months. 9
Received$ 3 comma 100$3,100
cash from customers for services rendered. 15
Received bill from TheLawyer for magazine? subscription,$ 200$200.
?(Use Miscellaneous Expense? account.) 23
Finished court hearings on behalfof a client and submitted a bill for legal? services,$ 12 comma 000$12,000?,
on account. 28
Paid bill from TheLawyer.
30
Paid? utilities,$ 1 comma 300$1,300.
3131
Received$ 1 comma 000$1,000
cash from clients billed onMarchMarch
23. 3131
Cash dividends of$ 3 comma 000$3,000
were paid to stockholders.
.
Analyze the effects of thepreceding events on the accounting equation ofAvaAva
PetrilloPetrillo?,
Attorney. 2.
Prepare the following financial? statements:
a. Income statement.
b. Statement of retained earnings.
c. Balance sheet.
d. Statement of cash flows.
.
Requirement 1. Analyze the effects of thepreceding events on the accounting equation of
AvaAva
PetrilloPetrillo?,
Attorney.Analyze the events? chronologically, one transaction ata time. Beginning with the transaction on the? 2nd, calculate thebalance in each account after analyzing the effect of thetransaction on the accounting equation. After calculating theending balance of each account on the
3131?st,
calculate total assets and total liabilities and equity.?(Complete only the necessary answer boxes for your transactionlines. If a transaction is personal and does not affect the?business, leave the transaction line blank. Carry down all balancesto the? "Bal." line, including zero balance? accounts, entering a?"0" for any zero balances. Enter a decrease in an account with aminus sign or parentheses. Abbreviations? used: A/P? = Accounts?Payable; A/R? = Accounts? Receivable; Com.? = Common; Contr. Cap.?= Contributed? Capital; Div.? = Dividends; Comp.? = Computer; Exp.?= Expense; Liab.? = Liabilities; Misc.? = Miscellaneous; Rev.? =Revenue; Sup.? = Supplies; Util.? = Utilities.)
ASSETS
=
LIAB.
+
EQUITY
Contr.
Cap.
+
Retained Earnings
Cash
+
A/R
+
Office
+
Comp.
=
A/P
+
Com.
-
Div.
+
Service
-
Util.
-
Misc.
Sup.
Stock
Rev.
Exp.
Exp.
3/1
72,000
+
+
+
=
+
-
+
-
-
3/2
+
+
+
=
+
-
+
-
-
Bal.
+
+
+
=
+
-
+
-
-
AvaAva
PetrilloPetrillo
recently opened her own law office on
MarchMarch
?1, which she operates as a corporation. The name of the newentity is
AvaAva
PetrilloPetrillo?,
Attorney.
PetrilloPetrillo
experienced the following events during the organizing phase ofthe new business and its first month of? operation,
MarchMarch
20182018.
Some of the events were personal and did not affect the lawpractice. Others were business transactions and should be accountedfor by the business.
Mar.Mar.???1 | Sold personal investment in Amazon?stock, which she had owned for several? years, receiving $ 33 comma 000$33,000 cash. | |
2 | Deposited the $ 33 comma 000$33,000 cash from the sale of the Amazon stock in her personal bankaccount. | |
3 | Deposited $ 60 comma 000$60,000 cash in a new business bank account titledAvaAva PetrilloPetrillo?, Attorney. The business issued common stock toPetrilloPetrillo. | |
5 | Paid $ 450$450 cash for ink cartridges for the printer. | |
7 | Purchased computer for the law?office, agreeing to pay the? account, $ 7 comma 000$7,000?, within three months. | |
9 | Received $ 3 comma 100$3,100 cash from customers for services rendered. | |
15 | Received bill from TheLawyer for magazine? subscription, $ 200$200. ?(Use Miscellaneous Expense? account.) | |
23 | Finished court hearings on behalfof a client and submitted a bill for legal? services, $ 12 comma 000$12,000?, on account. | |
28 | Paid bill from The Lawyer. | |
30 | Paid? utilities, $ 1 comma 300$1,300. | |
3131 | Received $ 1 comma 000$1,000 cash from clients billed onMarchMarch 23. | |
3131 | Cash dividends of $ 3 comma 000$3,000 were paid to stockholders. |
. | Analyze the effects of thepreceding events on the accounting equation of AvaAva PetrilloPetrillo?, Attorney. |
2. | Prepare the following financial? statements: a. Income statement. b. Statement of retained earnings. c. Balance sheet. d. Statement of cash flows. |
.
Requirement 1. Analyze the effects of thepreceding events on the accounting equation of
AvaAva
PetrilloPetrillo?,
Attorney.Analyze the events? chronologically, one transaction ata time. Beginning with the transaction on the? 2nd, calculate thebalance in each account after analyzing the effect of thetransaction on the accounting equation. After calculating theending balance of each account on the
3131?st,
calculate total assets and total liabilities and equity.?(Complete only the necessary answer boxes for your transactionlines. If a transaction is personal and does not affect the?business, leave the transaction line blank. Carry down all balancesto the? "Bal." line, including zero balance? accounts, entering a?"0" for any zero balances. Enter a decrease in an account with aminus sign or parentheses. Abbreviations? used: A/P? = Accounts?Payable; A/R? = Accounts? Receivable; Com.? = Common; Contr. Cap.?= Contributed? Capital; Div.? = Dividends; Comp.? = Computer; Exp.?= Expense; Liab.? = Liabilities; Misc.? = Miscellaneous; Rev.? =Revenue; Sup.? = Supplies; Util.? = Utilities.)
ASSETS | = | LIAB. | + | EQUITY | |||||||||||||||
Contr. | |||||||||||||||||||
Cap. | + | Retained Earnings | |||||||||||||||||
Cash | + | A/R | + | Office | + | Comp. | = | A/P | + | Com. | - | Div. | + | Service | - | Util. | - | Misc. | |
Sup. | Stock | Rev. | Exp. | Exp. | |||||||||||||||
3/1 | 72,000 | + | + | + | = | + | - | + | - | - | |||||||||
3/2 | + | + | + | = | + | - | + | - | - | ||||||||||
Bal. | + | + | + | = | + | - | + | - | - | ||||||||||
