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Calculate total assets and total liabilities and equity

P1-46A

Angela Petrillo recently opened her own law office, which she operates as a corporation. The name of the new entity is Angela Petrillo, Attorney. Petrillo experienced the following events during the organizing phase of the new business and its first month of operation, March 2016. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business.

Requirement 1. Analyze the effects of the preceding events on the accounting equation of

Angela Petrillo, Attorney. Analyze the events chronologically, one transaction at a time. Beginning with the transaction on the 2nd, calculate the balance in each account after analyzing the effect of the transaction on the accounting equation. After calculating the ending balance of each account on the

31st, calculate total assets and total liabilities and equity.

(Complete only the necessary answer boxes for your transaction lines. [If a box is not used in the table leave the box empty; do not enter a zero for the transaction lines.] If a transaction is personal and does not affect the business, leave the transaction line blank. Carry down all balances to the "Bal." line, including zero balance accounts, entering a "0" for any zero balances. Enter a decrease in an account with a minus sign or parentheses. Abbreviations used: A/P = AccountsPayable; A/R = Accounts Receivable; Com. = Common; Contr. Cap. = Contributed Capital; Div. = Dividends; Comp. = Computer; Exp. = Expense; Liab. = Liabilities; Misc. = Miscellaneous; Rev. = Revenue; Sup. = Supplies; Util. = Utilities.)

ASSETS

=

LIAB.

+

EQUITY

Contr.

Cap.

+

Retained Earnings

Cash

+

A/R

+

Office

+

Comp.

=

A/P

+

Com.

-

Div.

+

Service

-

Util.

-

Misc.

Sup.

Stock

Rev.

Exp.

Exp.

3/1

+

+

+

=

+

-

+

-

-

3/2

+

+

+

=

+

-

+

-

-

Bal.

0

+

0

+

0

+

0

=

0

+

0

-

0

+

0

-

0

-

0

3/3

72,000

+

+

+

=

+

72,000

-

+

-

-

Bal.

72,000

+

0

+

0

+

0

=

0

+

72,000

-

0

+

0

-

0

-

0

3/5

(350)

+

+

350

+

=

+

-

+

-

-

Bal.

71,650

+

0

+

350

+

0

=

0

+

72,000

-

0

+

0

-

0

-

0

3/7

+

+

+

5,500

=

5,500

+

-

+

-

-

Bal.

71,650

+

0

+

350

+

5,500

=

5,500

+

72,000

-

0

+

0

-

0

-

0

3/9

2,500

+

+

+

=

+

-

+

2,500

-

-

Bal.

74,150

+

0

+

350

+

5,500

=

5,500

+

72,000

-

0

+

2,500

-

0

-

0

3/15

+

+

+

=

340

+

-

+

-

-

340

Bal.

74,150

+

0

+

350

+

5,500

=

5,840

+

72,000

-

0

+

2,500

-

0

-

340

3/23

+

18,000

+

+

=

+

-

+

18,000

-

-

Bal.

74,150

+

18,000

+

350

+

5,500

=

5,840

+

72,000

-

0

+

20,500

-

0

-

340

3/28

(340)

+

+

+

=

(340)

+

-

+

-

-

Bal.

73,810

+

18,000

+

350

+

5,500

=

5,500

+

72,000

-

0

+

20,500

-

0

-

340

3/30

(1,300)

+

+

+

=

+

-

+

-

1,300

-

Bal.

72,510

+

18,000

+

350

+

5,500

=

5,500

+

72,000

-

0

+

20,500

-

1,300

-

340

3/31

1,800

+

(1,800)

+

+

=

+

-

+

-

-

Bal.

74,310

+

16,200

+

350

+

5,500

=

5,500

+

72,000

-

0

+

20,500

-

1,300

-

340

3/31

(2,000)

+

+

+

=

+

-

2,000

+

-

-

Bal.

72,310

+

16,200

+

350

+

5,500

=

5,500

+

72,000

-

2,000

+

20,500

-

1,300

-

340

Tot.

$94,360

=

$94,360

Requirement 2. Prepare the financial statements.

  1. Income statement. (If a box is not used in the table leave the box empty; do not select a label or enter a zero.)

Review the ending balances of the accounts from Requirement 1.

Angela Petrillo, Attorney

Income Statement

Month Ended March 31, 2016

Revenues:

Service Revenue

$20,500

Expenses:

Miscellaneous Expense

$340

Utilities Expense

1,300

Total Expenses

1,640

Net Income

$18,860

  1. Statement of retained earnings.

Enter any increases in retained earnings prior to the subtotal and any decreases to retained earnings below the subtotal. (Enter a "0" for any zero balances. Use a minus sign or parentheses to show a decrease in retained earnings.)

Review the ending balances of the accounts from Requirement 1.

Angela Petrillo, Attorney

Statement of Retained Earnings

Month Ended March 31, 2016

Retained Earnings, March 1, 2016

$0

Net income for the month

18,860

18,860

Dividends

(2,000)

Retained Earnings, March 31, 2016

$16,860

  1. Balance sheet. (If a box is not used in the table leave the box empty; do not select a label or enter a zero.)

Review the ending balances of the accounts from Requirement 1.

Angela Petrillo, Attorney

Balance Sheet

Assets

Liabilities

Cash

$72,310

Accounts Payable

$5,500

Accounts Receivable

16,200

Stockholders' Equity

Office Supplies

350

Common Stock

72,000

Computer

5,500

Retained earnings

16,860

Total Stockholders' Equity

88,860

Total Assets

$94,360

Total Liabilities and Stockholders' Equity

$94,360

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