90.2K

Verified Solution

Link Copied!

Main question highlighted in bold (in 4 parts).

The following financial statements were prepared at the end of the month of May:

TOPS IN TOPIARY - INCOME STATEMENT FOR the month of May

Revenue				$	2,540
Expenses:
Rent Expense	$	500
Advertising Expense	$	500
Wages Expense	$	200		$	1,200
Net Income				$	1,340

TOPS IN TOPIARY - STATEMENT OF OWNER'S EQUITY FOR the month of MAY

Owner's Equity at May 1	$	0
plus: Investment		2,000
plus: Net Income		1,340
less: Withdrawals		0
Owner's Equity at May 31	$	3,340

TOPS IN TOPIARY - BALANCE SHEET AS OF MAY 31

ASSETS							LIABILITES AND OWNER'S EQUITY
Current Assets:							Current Liabilities:
Cash	$	1,380					Accounts Payable	$	300
Accounts Receivable	$	1,500					Advertising Payable	$	500
Prepaid Rent	$	500					Advances from Customers	$	200
Prepaid Advertising	$	500
Supplies	$	100
Equipment				$	360		Owner's Equity	$	3,340
Total Assets				$	4,340		Total Liabilities & OE	$	4,340

During June the following transactions occurred:

1) Completed a job for which the customer paid $200 in June. The invoice is for $1,000.

2) Hire a helper and paid $200 for works done.

3) Paid $500 for the rent of July.

4) Purchased supplies for $300. At the end of June notices that there are $200 of supplies left.

5) Orders new flyers for advertising. They will be ready in July but the printer asked to be paid in advance $100.

6) In June collected in cash $3,000 for 3 jobs done for a total of $4,200, the rest is owed in account by the customers.

7) In June decided to start depreciating the equipment bought for $360 that is expected to last for 3 years.

A) follow CASH Basis for the period ended on June 30^th and then answer the questions. At the end of the accounting period (June 30^th), what is the total of Cash?

B) Follow CASH Basis for the period ended on June 30^th and then answer the questions. At the end of the accounting period (June 30^th), what is the total of current assets?

C) During June the following transactions occurred:

1) Paid the helper the $200 owed from works done in May (the amount owed is in Accounts Payable).

2) Completed the job for which the customer paid $200 in May. Tops in Topiary collected $1,000 in cash once finished.

3) Paid $500 for the rent of July.

4) At the end of June notices that there are no supplies left. Makes a note to buy some in July.

5) At the end of June notices that there are few flyers left (used for advertising) worth $100 and decides to order some for July. Before ordering, the printer (supplier of flyers) asks to be paid $500 of the amount owed for the flyers done in May. Tops in Topiary pays $500.

6) In June collected in cash $3,000 for 3 jobs are done for a total of $4,200, the rest is owed in account by the customers.

7) In June decided to start depreciating the equipment bought for $360 that is expected to last for 3 years.

8) In June 23^rd Edward Scissorhands withdrew some cash for personal reasons ($3,000).

Follow ACCRUAL Basis for the period ended on June 30^th and then answer the question. At the end of the accounting period (June 30^th, after AJE), what is the balance of Equipment net of depreciation?

D) During June the following transactions occurred:

1) Paid the helper the $1,000 owed from works done in May (the amount owed is in Accounts Payable).

2) Completed the job for which the customer paid $200 in May. Tops in Topiary collected $2,000 in cash once finished.

3) Paid $500 for the rent of July.

4) At the end of June notices that there are no supplies left. Makes a note to buy some in July.

5) At the end of June notices that there are few flyers left (used for advertising) worth $200 and decides to order some for July. Before ordering, the printer (supplier of flyers) asks to be paid $600 of the amount owed for the flyers done in May. Tops in Topiary pays $600.

6) In June collected in cash $3,000 for 3 jobs are done for a total of $4,500, the rest is owed in account by the customers.

7) In June decided to start depreciating the equipment bought for $360 that is expected to last for 3 years.

8) In June 23^rd Edward Scissorhands withdrew some cash for personal reasons ($2,000).

Follow ACCRUAL Basis for the period ended on June 30^th and then answer the questions. At the end of the accounting period (June 30^th, after AJE), what is the balance of Rent Expense?

Answer & Explanation Solved by verified expert

See Answer