Given Data P01-07A:

Holden Graham started The Graham Co., a new business that began operations on May 1. The Graham Co. completed the following transactions during its first month of operations. May 1 H. Graham invested $43,000 cash in the company. 1 The company rented a furnished office and paid $2,200 cash for Mays rent. 3 The company purchased $1,940 of office equipment on credit. 5 The company paid $750 cash for this months cleaning services. 8 The company provided consulting services for a client and immediately collected $5,800 cash. 12 The company provided $2,800 of consulting services for a client on credit. 15 The company paid $850 cash for an assistants salary for the first half of this month. 20 The company received $2,800 cash payment for the services provided on May 12. 22 The company provided $4,000 of consulting services on credit. 25 The company received $4,000 cash payment for the services provided on May 22. 26 The company paid $1,940 cash for the office equipment purchased on May 3. 27 The company purchased $85 of advertising in this months (May) local paper on credit; cash payment is due June 1. 28 The company paid $850 cash for an assistants salary for the second half of this month. 30 The company paid $400 cash for this months telephone bill. 30 The company paid $260 cash for this months utilities. 31 H. Graham withdrew $2,000 cash from the company for personal use. Required 1. Arrange the following asset, liability, and equity titles in a table like Exhibit 1.9: Cash; Accounts Receivable; Office Equipment; Accounts Payable; H. Graham, Capital; H. Graham, Withdrawals; Revenues; and Expenses. 2. Show effects of the transactions on the accounts of the accounting equation by recording increases and decreases in the appropriate columns. Do not determine new account balances after each transaction. Determine the final total for each account and verify that the equation is in balance. 3. Prepare an income statement for May, a statement of owners equity for May, a May 31 balance sheet, and a statement of cash flows for May.

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 01-07A THE GRAHAM CO.

Date May 1 1 3 5 8 12 15 20 22 25 26 27 28 30 30 31 $

Cash 43,000 (2,200) (750) 5,800

Assets = Accounts Office Receivable Equipment

Accounts Payable

Liabilities + H. Graham Capital 43,000

Equity H. Graham Withdrawals Revenues

1,940

1,940 5,800 2,800

2,800 (850) 2,800 4,000 (1,940) (850) (400) (260) (2,000) 46,350 $
Correct!

(2,800) 4,000 (4,000) (1,940) 85

4,000

Correct!

1,940
Correct!

85
Correct!

43,000
Correct!

(2,000) (2,000) $
Correct!

12,600
Correct!

THE GRAHAM CO. Income Statement For the Month Ended May 31 Revenues: Consulting services revenue Expenses: Rent expense Salaries expense Advertising expense Cleaning expense Telephone expense Utilities expense Total expenses Net income

$ $2,200 1,700 85 750 400 260 $

12,600

5,395 7,205
Correct!

THE GRAHAM CO. Statement of Owner's Equity For the Month Ended May 31 H. Graham, Capital, May 1 Add: Investment by Owner Net income Less: Withdrawals by Owner H. Graham, Capital, May 31 $0 43,000 7,205 $50,205 2,000 $48,205

Correct!

THE GRAHAM CO. Balance Sheet May 31 Assets Cash Office equipment Total assets Liabilities Accounts payable Owner's Equity H. Graham, Capital Total liabilities and equity $ 85 $ 46,350 1,940 $48,290

48,205 $48,290
Correct!

THE GRAHAM CO. Statement of Cash Flows For Month Ended May 31 Cash flows from operating activities: Cash received from customers Cash paid for rent Cash paid for cleaning Cash paid for telephone Cash paid for utilities Cash paid to employees Net cash provided by operating activities Cash flows from investing activities: Purchase of equipment Net cash used by investing activities Cash flows from financing activities: Investments by owner Withdrawals by owner Net cash provided by financing activities Net increase in cash Cash balance, May 1 Cash balance, May 31

12,600 (2,200) (750) (400) (260) (1,700) $ 7,290 - Correct!

(1,940) (1,940) - Correct!

43,000 (2,000) 41,000 - Correct! $ $ 46,350 46,350

McGraw-Hill/Irwin Problem 01-07A

Equity Expenses (2,200) (750)

(850)

(85) (850) (400) (260) $ (5,395)

Correct!

Given Data P01-08A:

Problem 1-8A Helga Anderson started a new business and completed these transacti Dec.

Required 1. Arrange the following asset, liability, and equity titles in a table lik 2. Use additions and subtractions to show the effects of each transact 3. Use the increases and decreases in the columns of the table from p statement of owners equity, and a statement of cash flowseach of Analysis Component 4. Assume that the owner investment transaction on December 1 was Anderson Electric obtained another $19,800 in cash by borrowing it f

Given Data P01-08A:

Problem 1-8A Helga Anderson started a new business and completed these transactions during December. 1 Helga Anderson transferred $68,800 cash from a personal savings account to a checking account in the name of An 2 The company rented office space and paid $1,800 cash for the December rent. 3 The company purchased $13,000 of electrical equipment by paying $4,800 cash and agreeing to pay the $8,200 bal 5 The company purchased office supplies by paying $1,000 cash. 6 The company completed electrical work and immediately collected $1,600 cash for these services. 8 The company purchased $2,680 of office equipment on credit. 15 The company completed electrical work on credit in the amount of $6,000. 18 The company purchased $360 of office supplies on credit. 20 The company paid $2,680 cash for the office equipment purchased on December 8. 24 The company billed a client $1,000 for electrical work completed; the balance is due in 30 days. 28 The company received $6,000 cash for the work completed on December 15. 29 The company paid the assistants salary of $1,500 cash for this month. 30 The company paid $570 cash for this months utility bill. 31 H. Anderson withdrew $900 cash from the company for personal use. 1. Arrange the following asset, liability, and equity titles in a table like Exhibit 1.9: Cash; Accounts Receivable; 2. Use additions and subtractions to show the effects of each transaction on the accounts in the accounting 3. Use the increases and decreases in the columns of the table from part 2 to prepare an income statement, a statement of owners equity, and a statement of cash flowseach of these for the current month. Also prepare a Analysis Component 4. Assume that the owner investment transaction on December 1 was $49,000 cash instead of $68,800 and that Anderson Electric obtained another $19,800 in cash by borrowing it from a bank. Explain the effect of this change

ANDERSON E

Transac

checking account in the name of Anderson Electric.

December 1 2 3 3 5 6 8 15 18 20 24 28 29 30 31

h and agreeing to pay the $8,200 balance in 30 days.

Check figures: (2) Ending balances

(3)

ANDERSON ELECTRIC Transactions December Transferred into business account Cash paid for month's rent Cash paid for electrical equipment Total paid for electrical equipment Cash paid for office supplies Amount collected for work completed Office equipment purchased on credit Completed work on credit Office supplies purchased on credit Cash paid for office equipment purchased December 8 Billed client for work completed Received for December 15th work Paid assistant's salary Paid monthly utility bill Withdrew for personal use 1,000 6,000 1,500 570 900 $ 68,800 1,800 4,800 13,000 1,000 1,600 2,680 6,000 360 2,680

Check figures: (2) Ending balances Cash Accounts Payable Net income Total assets $ 63,150 8,560 $ 4,730 81,190

Student Name: Class: Problem 01-08A

ANDERSON ELECTRIC

Assets Accounts Date Dec. 1 2 Bal. 3 Bal. 5 Bal. 6 Bal. 8 Bal. 15 Bal. 18 Bal. 20 Bal. 24 Bal. 28 Bal. 29 Bal. 30 Bal. 31 Bal. $ Try again! $ Try again! $ $ $ Cash Receivable Office Supplies Office Equip. Elect. Equip.

= Liabilities Accounts Payable H. Anderson Capital

+ Equity H. Anderson Withdrawals Revenues Expenses

$ $ Try again! $

Try again! $

Try again!

Try again!

Try again!

Try again!

Try again!

Try again!

Student Name: Class: Problem 01-08A ANDERSON ELECTRIC Income Statement For the Month Ended December 31 Revenues: Electrical fees earned Expenses: Rent expense Salaries expense Utilities expense Total expenses Net income

ANDERSON ELECTRIC Statement of Owner's Equity For the Month Ended December 31 H. Anderson, Capital, December 1 Plus: Investments by owner Net income Total Less: Withdrawals by owner H. Anderson, Capital, December 31

ANDERSON ELECTRIC Balance Sheet December 31 Assets Cash Accounts receivable Office supplies Office equipment Electrical equipment Total assets Liabilities Accounts payable Owner's Equity H. Anderson, Capital Total liabilities and equity

Student Name: Class: Problem 01-08A ANDERSON ELECTRIC Statement of Cash Flows For Month Ended December 31 Cash flows from operating activities: Cash received from customers Cash paid for rent Cash paid for supplies Cash paid for utilities Cash paid to employees Net cash provided by operating activities Cash flows from investing activities: Purchase of office equipment Purchase of electrical equipment Net cash used by investing activities Cash flows from financing activities: Investments by owner Withdrawals by owner Net cash provided by financing activities Net increase in cash Cash balance, December 1 Cash balance, December 31

Part 4: Assume Helga Anderson contributed $49,000 cash and borrowed the $19,800 difference from a bank. Explain the effect of this change on total assets, liabilities, and equity.