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    Salman_Rsahid's Avatar
    Salman_Rsahid Posts: 1, Reputation: 1
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    #1

    Mar 6, 2011, 11:30 PM
    How to create income statement and balance sheet from transactions
    Business started December 31,2007, Investment of $ 30,000 cash It has been operating for one year. Additional investment $ 20,000, The company rent out snowboard and related gear . The balance sheet accounts at November 30, 2008 are as follows.
    Cash: $ 2,000
    Accounts receivable : $ 18,000
    Rental Gear : 36,000
    Snowboard: 68,000
    Store Equipment: $ 26,000
    Accounts Payable :$ 24,000
    The Following Transactions took place during the month of December 2008
    Dec 1, invest $ 24,000
    Dec 1, Business paid $ 6,000 for the month's rent
    Dec 6, Rental fees for week were : gear $ 12,000 and Boards,$ 28,000 Half CASH AND Half
    ON ACCOUNT
    Dec 10, BUSINESS PAID ACCOUNT PAYABLE
    FROM NOV 30, 2008
    DEC 12: Business PURCHASES Gear $ 18000 and boards $ 28,000
    DEC 13, Rental Fees for week : Gear $ 6,000 and snowboard in cash
    DEC 15 received payment for the account/ receivable owing for November
    DEC 18 purchased equipment : 8,000 and pay cash 2,000, Balance due 60 days
    Dec 20 rental fees Gear 8,000 and Board $ 20,000, Half cash ans Half on accounts
    Dec 24 Business paid balance on Dec,12 owing for purchases
    Dec 27 rental fees for Gear: 4,000 Board $ 16,000 Cash
    Dec 27 company received payment for rental fees on account from December 6
    Prepare income statement Balance Sheet for DEC 31, 2008
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Mar 7, 2011, 07:13 AM

    You need to set-up T accounts for all of your accounts with the beginning account balances in either the debit or credit side of the T accounts. Now you post your transactions and after you post all of your transactions you need to get your ending account balances. Next you transfer your T account balances to a worksheet and get a trial balance. If your trial balance balances you will be able to prepare your income statement.

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