Question

Required information [The following information applies to the questions displayed below.] Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s records show the following accounts and amounts for the month of August. Cash $ 25,350 C. Camry, Withdrawals $ 5,980 Accounts receivable 22,340 Consulting fees earned 26,980 Office supplies 5,230 Rent expense 9,530 Land 43,990 Salaries expense 5,590 Office equipment 19,980 Telephone expense 850 Accounts payable 10,660 Miscellaneous expenses 500 Use the above information to prepare an August income statement for the business. Use the above information to prepare an August statement of owner’s equity for Help Today. The owner’s capital account balance at July 31 was $0, and the owner invested $101,700 cash in the company on August 1. Use the above information to prepare an August 31 balance sheet for Help Today. Hint: Compute the owner’s capital account balance as of August 31.

Answer 1

Solution:
	Income Statement
	Consulting fees earned	$26,980
	Rent Expense	($9,530)
	Salaries Expense	($5,590)
	Telephone Expense	($850)
	Miscellanous Expense	($500)
	Net Income	$10,510
	Less: Dividend	-
	Retained Earnings	$10,510
	Owner's Capital Account at Aug 31
	Beginning balance of Owner's capital	$0
	Owner's Capital During the year (cash invested)	$101,700
	Less: Withdrawals	($5,980)
	Ending Balance	$95,720
	Statement of Owner's Equity
	Owner's Capital Account balance at Aug 31	$95,720
	Retained Earnings	$10,510
	Total	$106,230

Help Today
Balance sheet as on Aug 31
Assets	$	Liabilities	$
Cash	$25,350	Accounts Payable	$10,660
Accounts Receivable	$22,340	Owner's Equity	$106,230
Office Supplies	$5,230
Land	$43,990
Office Equipment	$19,980
Total Assets	$116,890	Total Liabilities and equity	$116,890

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