Problem 1. Ramsey Corporation reported the following accounts and balances in its financial statements:
Cash $35,000
Inventory $10,200
Equipment $19,500
Accounts Payable $16,350
Contributed capital $30,000
Retained earnings $18,350
Arrange the accounts and balances into the accounting equation using the following equation and then answer the following questions.
Assets = liabilities + owners' equity
1. What is the total amount of assets?
2. What is the total amount of liabilites?
3. What is the total amount of owners' equity?
Problem 2. After six months of operations, Right Way Lumber had the following revenues and expense balances:
Supplies expense $11,000
Service revenue $62,090
Utilities expense $6,200
Rent expense $14,700
Wages expense #13,330
Prepare an income statement in its proper format ending on June 30,2009. You should include the heading and left align it so the formatting is understandable.
Problem 3. Jim Smith had trouble finding a job, so he decided to start his own sole proprietorship by the name of Designers Inc. Jim is a Web site designer, and here are the results as of the end of the first year of his business.
Accounts payable $12,100
Cash $19,150
Service revenue $20,000
Contributed capital $21,000
Wages expense $4,100
Inventory $4,445
Rent expense $5,000
Equipment $16,325
Supplies expense $4,080
Retained earnings $6,820
Prepare a balance sheet in proper format with the heading left aligned.
Problem 4. Woodcross LLC had the following events occur during the month of July:
1. Received $40,000 from investors for contributed capital
2. Borrowed %15,500 from the bank
3. Paid $4,100 for rent
4. Made sales on account for $12,500
5. Made cash sales to customers totaling $29,700
6. Repaid part of bank loan for $6,000
7. Purchased new equipment for $5,000
8. Paid $13,000 for wages
9. Paid $1,900 for utilities
Prepare the nine journal entries using the following example so that the formatting will be clear:
Debit account #1 name $xxx
Credit account #2 name $xxx
No need to indent, include "debit" and "credit" for account name and amount for clarity.