Question

Question 2

Jeff Ground is the manager/owner of a landscaping business named Ground Rules. The following summarized Ground Rules’ financial position on October 01, 2018:

Accounts                                                         Accounts         Owner’s

Cash    +   Receivable + Supplies + Land         =             Payable +       Equity

Balance   35,000         20,000                          100,000                    45,000             110,000

Ground Rules transacted the following during October 2018:

1. Jeff Ground received a $ 10,000 inheritance check and he deposited the Check into Ground Rules’ bank account.
2. Ground Rules collected $ 15,000 of its accounts receivable opening balance.
3. Ground Rules paid the opening balance of its accounts payable.
4. Ground Rules did some landscaping for a client and invoiced the client $ 25,000.
5. Ground Rules purchased $ 7,000 supplies on account.
6. Ground Rules incurred the following business expenses:
   • Paid $ 5,000 for equipment rental during October 2018
   • Paid $ 3,000 for truck repairs during October 2018
7. Ground Rules received $ 10,000 cash for yard work done on a huge job site.
8. Jeff Ground needed a vacation, so he withdrew $ 4,000 from Ground Rules’ bank account.
9. Jeff Ground returned from his vacation. As he only used $ 2,000 of the $ 4,000 vacation money that he withdrew from the business, he deposited the remaining $ 2,000 into Ground Rules’ bank account.

Required:

1. Complete the transaction sheet for Ground Rules
2. Prepare Ground Rules’ income statement at October 31, 2018.

Answer 1