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Financials for Interior Designers

Lois Bell began her interior design business with an initial investment of $50,000. Based on records from November 30, the business had $17,200 in cash, $23,000 in accounts receivable, $40,000 in office furnishings, $12,000 in accounts payable, $4,250 in notes payable, and $63,950 in owner's equity. The business earned $30,000 in fees and had $19,950 in net income for November.

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326 views2 pages

Financials for Interior Designers

Lois Bell began her interior design business with an initial investment of $50,000. Based on records from November 30, the business had $17,200 in cash, $23,000 in accounts receivable, $40,000 in office furnishings, $12,000 in accounts payable, $4,250 in notes payable, and $63,950 in owner's equity. The business earned $30,000 in fees and had $19,950 in net income for November.

Uploaded by

shigeka
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

215.

 From the information given below, prepare a November income statement, a November
statement of owner’s equity, and a November 30 balance sheet. On November 1 of the current
year, Lois Bell began Lois Bell, Interior Design with an initial investment of $50,000 cash. On
November 30, her records showed the following (alphabetically arranged) items and amounts.

 
$12,00
Accounts payable……………. 0 Office furnishings……….. $40,000
Accounts receivable………. 23,000 Owner's withdrawals……. 6,000
Cash……………………… 17,200 Rent expense…………… 3,600
Fees earned………………. 30,000 Salaries expense………. 6,200
Notes payable………………… 4,250 Telephone expense……. 250
 

 Answer:

LOIS BELL, INTERIOR DESIGN


Income Statement
For Month Ended November 30
Revenue:  
Fees earned……………………….. $30,000
Operating expenses:
Rent expense……………………………. $3,600
Salaries expense………………………… 6,200
Telephone expense……………………… 250 10,050
Net income…………………………………….. $19,950

  

LOIS BELL, INTERIOR DESIGN


Statement of Owner's Equity
For Month Ended November 30
Lois Bell, Capital, November 1……………………….. $ 0
Plus: Investments by
owner……………………………. $50,000
Net income………………………………. 19,950 69,950
69,950
Less withdrawals by owner……………………. (6,000)
$63,95
Lois Bell, Capital, November 30………………. 0

 LOIS BELL, INTERIOR DESIGN


Balance Sheet
November 30
Assets Liabilities
Cash…………………….
. $17,200 Accounts payable……….. $12,000
Accounts receivable…… 23,000 Notes payable………….... 4,250
Office Total
furnishings……….. 40,000 liabilities…………….. $16,250
Equity
Lois Bell, capital………… 63,950

Total liabilities and


Total assets……………. $80,200 equity……………………… $80,200

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