1. E1-8 A Increase asset (Cash) Increase owner’s equity (Capital)
B Increase asset (Supplies)
Decrease asset (Cash)
C Increase asset (Accounts Receivable)
Increase owner’s equity (Rental Revenue)

2. D Increase asset (Office Furniture)
Increase liability (Accounts Payable)
E Increase asset (Cash)
Decrease asset (Accounts Receivable)
F Decrease asset (Cash)
Decrease liability (Accounts Payable)

3. G Increase asset (Cash)
Decrease asset (Land)
H Increase asset (Cash)
Increase owner’s equity (Rental Revenue)
I Decrease asset (Cash)
Decrease owner’s equity (Rent Expense)

4. E1-11 JD’s Graphic Design Balance Sheet November 30, 20X9 ASSETS
LIABILITIES
Cash
$ 2,000
Accounts payable
$ 2,500
Accounts receivable
6,900
Note payable
8,000
Supplies
600
Total liabilities
10,500
Office equipment
15,500
OWNER’S EQUITY
             
J.D. Power, capital
14,500*
Total liabilities and
Total assets
$25,000
owner’s equity

5. E1-12 Award Specialties Income Statement Year Ended December 31, 20X6
Revenue:
Service revenue
$161,200
Expenses:
Salary expense
$60,000
Rent expense
24,000
Utilities expense
6,800
Supplies expense
4,000
Property tax expense
1,200
Total expenses
96,000
Net income
$ 65,200

6. Statement of Owner’s Equity
Award Specialties
Statement of Owner’s Equity
Year Ended December 31, 20X6
Capital, beginning of year $
Add: Investment by owner
15,000
Net income for the year (Req. 1)
65,200
80,200
Less: Withdrawals by owner
(53,100)
Capital, end of year
$ 27,100

7. P1-2A 2
Peavy Design
Income Statement
Month Ended May 31, 20X5
Revenues:
Service revenue ($1,100 + $5,000)
$6,100
Expenses:
Rent expense
$1,200
Advertising expense
660
Total expenses
1,860
Net income
$4,240

8. Statement of Owner’s Equity
Peavy Design
Statement of Owner’s Equity
Month Ended May 31, 20X5
Daniel Peavy, capital, April 30, 20X5
$23,660
Add: Investments by owner ($12,000 + $1,700)
13,700
Net income for the month
4,240
41,600
Less: Withdrawals by owner
(4,000)
Daniel Peavy, capital, May 31, 20X5
$37,600

9. Peavy Design
Balance Sheet
May 31, 20X5
ASSETS
LIABILITIES
Cash
$ 6,090
Accounts payable $
Accounts receivable
7,490
Supplies
640
OWNER’S EQUITY
Land
24,100
Daniel Peavy, capital
37,600
             
Total liabilities and
Total assets
$38,320
owner’s equity

10. Vail Financial Consultants
P1-5A
Vail Financial Consultants
Income Statement
Year Ended December 31, 20X4
Revenue:
Service revenue
$108,000
Expenses:
Salary expense
$38,000
Rent expense
14,000
Interest expense
4,000
Utilities expense
3,000
Property tax expense
2,000
Total expenses
61,000
Net income
$ 47,000

11. Vail Financial Consultants Statement of Owner’s Equity
Year Ended December 31, 20X4
Matthew Vail, capital, December 31, 20X3
$43,000
Add: Net income for the year
47,000
90,000
Less: Withdrawals by owner
(32,000)
Matthew Vail, capital, December 31, 20X4
$58,000

12. Vail Financial Consultants
Balance Sheet
December 31, 20X4
ASSETS
LIABILITIES
Cash
$ 7,000
Accounts payable
$ 12,000
Accounts receivable
3,000
Interest payable
1,000
Supplies
7,000
Note payable
31,000
Equipment
21,000
Total liabilities
44,000
Building
56,000
OWNER’S EQUITY
Land
8,000
Matthew Vail, capital
58,000*
               
Total liabilities and
Total assets
$102,000
owner’s equity

13. Result of operations: Net income of $47,000
The owner increased the company’s capital.
Net income ($47,000) exceeded withdrawals by the owner ($32,000).This would make it easier to borrow because the business’s equity is growing. c
Total economic resources (total assets)……
$102,000 –
Total amount owed (total liabilities)………
(44,000) =
Owner’s equity……………………………..
$ 58,000

14. Bellmead Auto Repair
Income Statement
Year Ended December 31, 20X8
Revenue:
Service revenue
$101,000
Expenses:
Salary expense
$42,000
Rent expense
8,000
Fuel expense
6,000
Insurance expense
4,000
Supplies expense
1,000
Total expenses
61,000
Net income
$40,000

15. Statement of Owner’s Equity
Bellmead Auto Repair
Statement of Owner’s Equity
Year Ended December 31, 20X8
Owner, capital, December 31, 20X7
$13,000
Add: Net income for the year
40,000
53,000
Less: Withdrawals by owner
(36,000)
Owner, capital, December 31, 20X8
$17,000

16. Bellmead Auto Repair
Balance Sheet
December 31, 20X8
ASSETS
LIABILITIES
Cash
$16,000
Accounts payable
$ 8,000
Accounts receivable
7,000
Supplies
2,000
OWNER’S EQUITY
Owner, capital
17,000
             
Total liabilities and
Total assets
$25,000
owner’s equity