[katelloyd11]

Accounting, 9e

P1-36A Preparing financial statements and evaluating business performance
LO 9 [20-30 minutes]
Students please fill-in areas that are shaded
Student Name
Course Name Accounting
Student ID:
Date: July 26, 2011

Studio Photography, works weddings and prom-type parties. The balance of
Ansel, capital was $16,000 at December 31, 2011. At December 31, 2012, the
business's accounting records show these balances:

Insurance expense $8,000 Accounts receivable $8,000
Cash 37,000 Note payable 12,000
Accounts payable 7,000 Ansel, capital, Dec. 31, 2012 125,000
Advertising expense 3,000 Salary expense 25,000
Service revenue 80,000 Equipment 50,000
Ansel, drawing 13,000 Owner investment, 2012 29,000



Requirements
1. Prepare the following financial statements for Studio Photography for the
year ended December 31, 2012:
a. Income statement
b. Statement of owner's equity
c. Balance sheet



Test Your Knowledge
P1-36A
Req. 1
Studio Photography
Income Statement
Year Ended December 31, 2012
Revenue: Accounts Recieveable 8,000
Service revenue $80,000
Expenses:



Total expenses -
Net income $80,000

Req. 2
Studio Photography
Statement of Owner's Equity
Year Ended December 31, 2012
$16,000
Owners Investment 2012 29,000
80,000
125,000

Ansel, capital, December 31, 2012 $125,000


Studio Photography
Balance Sheet
December 31, 2012
ASSETS LIABILITIES


Total liabilities $-
OWNER'S EQUITY


Ansel, capital 125,000
Total assets $- Total liabilities and owner's equity $125,000

[Just Looking]

Please read the following.

Announcement:

If you'll post your week (attach your spreadsheet), we can check it and help you. We'll want to see that you made an effort and that will help us see where you are having problems, which we can then explain. Thanks.

[katelloyd11]

Great thank you so much. I think I attached it correctly!

[Just Looking]

Is there any chance you've left something out of the acounts? I can't get it to balance, making me think something is missing.

For now, let's address the work as is. Your Income Statement should only include Revenue and Expenses. Your Balance Sheet should only include Assets, Liabilities, and Equity accounts. You have a mixture in both.

The Owner's Equity statement should start with the balance last year, show the adjustments for this year, and end with the current ending balance. However, until we figure out why you are not in balance to start you won't be able to complete that part.

[katelloyd11]

I scanned the textbook and uploaded, thank you so very much for all of your help.

[katelloyd11]

I am not sure what I am missing, I am trying to attached the pages from the text book, but it will not let me. I can not thank you even for all your help!

[katelloyd11]

The ones below I oculd not get to open, please let me know if you were able to view them. Again tahnk you so much!

[Just Looking]

Yes, I can open them. Okay, this is making more sense. They have a ? For the Capital at 12/31/12. In your first worksheet, you were showing that at $125,000. Let's do this step by step. Can you correct your worksheet for the Income Statement? It should only show Revenues and Expenses. You will be able to identify those by the account titles. If you'll repost your work, I'll check it. Once you have that right, we can move on.

[katelloyd11]

Ok I think I got it right for the Income statement. Thank you so much!

[Just Looking]

Not quite. It should only have those accounts that are revenues or expenses, and their account titles tell you this. As one example, Notes Payable does not have "expense" in it. I notice that you have it included in the total for your first column, but not in the second. Maybe you understand and just need to show it correctly? Same with Accts Rec cash.

Where did you get the amount for Advertising Expense? Look at that figure again.