PSMusic Compreprob

Assets = Liabilities + Owner's Equity
A S S E T S = LIABILITIES + CAPITAL - Drawing +

Pat Pat
Accounts Accounts Sharpe, Sharpe,
Cash + Receivable + Supplies = Payable + Capital - Drawing +
June 1 5,000 5,000
2 3,600 +
Bal. 8,600 5,000
June 2 (750)
Bal. 7,850 5,000
June 4 + 350 + 350
Bal. 7,850 350 350 5,000
June 6 (450)
Bal. 7,400 350 350 5,000
June 8 (700)
Bal. 6,700 350 350 5,000
June 12 (350)
Bal. 6,350 350 350 5,000
June 13 (100) - (100)
Bal. 6,250 350 250 5,000
June 16 500 +
Bal. 6,750 350 250 5,000
June 22 + 1,250 +
Bal. 6,750 1,250 350 250 5,000
June 25 400 +
Bal. 7,150 1,250 350 250 5,000
June 29 (240)
Bal. 6,910 1,250 350 250 5,000
June 30 900 +
Bal. 7,810 1,250 350 250 5,000
June 30 (400)
Bal. 7,410 1,250 350 250 5,000
June 30 (300)
Bal. 7,110 1,250 350 250 5,000
June 30 - (180)
Bal. 7,110 1,250 170 250 5,000
June 30 (300)
Bal. 6,810 1,250 170 250 5,000
June 30 (1,000)
Bal. 5,810 1,250 170 250 5,000
June 30 (500) - 500
Bal. 5,310 1,250 170 250 5,000 - 500
REVENUES - E X P E N S E S
Office Equip. Adver-
Fees Music Rent Rent tising Wages Utilities Supplies Misc.
Earned - Exp. - Exp. - Exp. - Exp. - Exp. - Exp. - Exp. - Exp.
3,600
3,600
- 750
3,600 - 750
3,600 - 750
- 450
3,600 - 750 - 450
- 700
3,600 - 750 - 700 - 450
350
3,600 350 - 750 - 700 - 450
3,600 350 - 750 - 700 - 450

500
4,100 350 - 750 - 700 - 450
1,250
5,350 350 - 750 - 700 - 450
400
5,750 350 - 750 - 700 - 450
240
5,750 590 - 750 - 700 - 450
900
6,650 590 - 750 - 700 - 450
- 400
6,650 590 - 750 - 700 - 450 - 400
- 300
6,650 590 - 750 - 700 - 450 - 400 - 300
- 180
6,650 590 - 750 - 700 - 450 - 400 - 300 - 180
- 300
6,650 590 - 750 - 700 - 450 - 400 - 300 - 180 - 300
1,000
6,650 1,590 - 750 - 700 - 450 - 400 - 300 - 180 - 300
6,650 1,590 - 750 - 700 - 450 - 400 - 300 - 180 - 300

Journal Entries:
JOURNAL BOOK
page
Date
Particulars/ Description PR Debit
2012
June 1 Cash L11 $ 5,000.00
Pat Sharpe, Capital L31
To record initial investment of Pat Sharpe.
2 Cash L11 3,600.00

Fees Earned L41
To record fees earned from a local radio station.
Office rent expense L51 750.00

Cash L11
To record paid office rent.
4 Supplies L14 350.00

Accounts payable L21
To record purchased supplies from City Office
Supply Co.
6 Advertising expense L55 450.00

Cash L11
To record paid advertising at a local radio station.
8 Equipment rent expense L52 700.00

Cash L11
To record cost of renting digital recording equip-
ment.
12 Music expense L54 350.00

Cash L11
To record payment to Cool Music for the use of
current music demos.
13 Accounts payable L21 100.00

Cash L11
To record payment made to City Office supply Co.
16 Cash L11 500.00

Fees earned L41
To record received amount for providing two music
sets to a dentist.
page
Date
Particulars/ Description PR Debit
2012
June 22 Accounts receivable L12 P 1,250.00
Fees earned L41
To record service income by serving as a disc
jockey for a wedding party.
25 Cash L11 400.00

Fees earned L41
To record received cash by serving as disk jockey
for a cancer charity ball.

Cash L11
To record use of Galaxy Music library music demos.
30 Cash L11 900.00

Fees earned L41
To record fees earned from serving as PS disk
jockey for a local club's monthly dance.
Wages expense L50 400.00

Cash L11
To record payment of PS Music share of the
receptionist salary for June.
Utilities expense L53 300.00

Cash L11
To record payment of PS Music share of the
utilities for June.
Supplies expense L56 180.00

Supplies L14
To record supplies used.
Miscellaneous expense L59 300.00

Cash L11
To record paid miscellaneous expense.
Music expense L54 1,000.00

Cash L11
To record paid royalties to National Music Clearing.
page
Date
Particulars PR Debit
June 30 Pat Sharpe, Drawings L32 500.00
Cash L11
To record Pat Sharpes' withdrawal.
July 1 Cash L11 4,000.00

Pat Sharpe, Capital L31
To record additional investment made by Pat Sharpe.
Office rent expense L51 1,800.00

Cash L11
To record payment of rent of office space.
Prepaid Insurance L15 2,700.00

cash L11
To record premium paid for a comprehensive insurance
policy covering liability, theft and fire.
2 Cash L11 1,250.00

Accounts receivable L12
To record received collections from customers.
3 Cash L11 7,200.00

Unearned revenue L23
To record amount received from WHBD as an advance
payment for the first two months.
Accounts payable L21 250.00

Cash L11
To record payment of account.
4 Miscellaneous expense L59 800.00

Cash L11
To record payment of attorney for reviewing the July 3rd
contract with WHBD.
5 office equipment L17### 6,000.00

To record account purchase of office equipment from
One-stop-Office mart.
page
Date
2012
Cash L11
To record payment of advertising expense.
11 Cash L11 900.00

Fees earned L41
To record fees earned.
13 Equipment rental expense L52 600.00

Cash L11
To record paid rental of digital recording equipment.
14 Wages expense L50 1,200.00

Cash L11
To record payment of wages for the receptionist and
part-time assistant.
16 cash L11 2,100.00

Fees earned L41
To record received amount for servicing as disk jockey
for a wedding reception.
18 Supplies L14 1,080.00

To record purchase of supplies on account.

Cash L11
To record payment of upload music for current music
demos.

Cash L11
To record paid advertising to a local radio station.
23 Cash L11 750.00

Accounts receivable L12 1,750.00
Fees earned L41
To record service rendered for a party.
page
Date
2012
July 27 Utilities expense L53 760.00
Cash L11
to record paid electric bills.
28 Wages expense L50 1,200.00

Cash L11
To record payment of wages.
29 Miscellaneous expense L59 370.00

Cash L11
To record payment of miscellaneous expenses.
30 Cash L11 400.00
Fees earned L41
to record services rendered to a charity ball.
31 Cash L11 2,800.00

Fees earned L41
To record service rendered to a party.
Music expense L54 1,400.00

Cash L11
To record payment of royalties to National Music
clearing for use of various music.
Pat Sharpe, Drawings L32 1,500.00

Cash L11
To record withdrawal made by pat sharpe.
a Unearned revenue L23 3,600.00

Fees earned L41
To take up fees earned and accruals made from services rendered
with WHBD computed as follows:
Total actual hours rendered 120 hrs.
Less: agreed no. hours per mo. ($3,600) 80 hrs
Difference 40 hrs
Multiply by billed rate $40/hr
Accrued income for the period $ 1,600
page
Date
2012
July b supplies expense L56 850.00
supplies L14
To take up supplies used computed as follows:
supplies (unadjusted) 1,250.00
Less: actual supplies on hand 400.00
Used supplies 850.00
c Insurance expense L57 225.00

Prepaid insurance L15
To take up insurance expense computed as follows;
Value of Insurance 2,700
Divide by coverage in months 12
Expense per month 225
d Depreciation expense L57 75.00

Accumulated depreciation - Office equipment L18
To take up depreciation of office equipment for the month.
e done with a
f Wages expense L51 170.00

Wages payable L22
To take up accrued wages.
closing entries:
Fees Earned 21,950.00
Income summary
To close income to income summary account.
Income summary 15,740.00

Music expense
Wages Expense
Office rent expense
Miscellaneous expense
Advertising expense
equipment rent expense
Utilities expense
Supplies expense
Insurance expense
depreciation expense
to close expenses to income summary account.
page
Date
2012
Income summary 6,210.00
Pat Sharpe, Capital
To close income summary to capital account.
Pat Sharpe, Capital 2,000.00

Pat sharpe, Drawings
To close drawings to capital
Reversing entires
Aug 1 fees earned 1,600.00
Accounts receivable.
To reverse the entry made.
Wages payable 170.00

Wages expense
1
Credit
$ 5,000.00
3,600.00
750.00
350.00
450.00
700.00
350.00
100.00
500.00
2
Credit
P 1,250.00
400.00
240.00
900.00
400.00
300.00
180.00
300.00
1,000.00
3
Credit
500.00
4,000.00
1,800.00
2,700.00
1,250.00
7,200.00
250.00
800.00
6,000.00
4
Credit
200.00
900.00
600.00
1,200.00
2,100.00
1,080.00
620.00
800.00
2,500.00
5
Credit
760.00
1,200.00
370.00
1,800.00
2,800.00
1,400.00
1,500.00
5,200.00
6
Credit
850.00
225.00
75.00
170.00
21,950.00
3,610.00
2,970.00
2,550.00
1,470.00
1,450.00
1,300.00
1,060.00
1,030.00
225.00
75.00
6
Credit
6,210.00
2,000.00
1,600.00
170.00
PS Music
Worksheet
For the two months ended July 31, 2012
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Titles Debit Credit Debit Credit Debit
L11 Cash 10,510.00 10,510.00
L12 Accounts receivable 3,150.00 a 1,600.00 4,750.00
L14 Supplies 1,250.00 b 850.00 400.00
L15 Prepaid Insurance 2,700.00 c 225.00 2,475.00
L17 Office equipment 6,000.00 6,000.00
L21 Accounts payable 7,080.00
L23 Unearned revenue 7,200.00 a 3,600.00
L31 Pat Sharpe, Capital 9,000.00
L32 Pat Sharpe, Drawing 2,000.00 2,000.00
L41 Fees Earned 16,750.00 a 5,200.00
L50 Wages Expense 2,800.00 f 170.00 2,970.00
L51 Office rent expense 2,550.00 2,550.00
L52 equipment rent expense 1,300.00 1,300.00
L53 Utilities expense 1,060.00 1,060.00
L54 Music expense 3,610.00 3,610.00
L55 Advertising expense 1,450.00 1,450.00
L56 Supplies expense 180.00 b 850.00 1,030.00
L59 Miscellaneous expense 1,470.00 1,470.00
Totals 40,030.00 40,030.00
Insurance expense c 225.00 225.00
depreciation expense d 75.00 75.00
accumulated dep'n-OE d 75.00
wages payable f 170.00
Totals 6,520.00 6,520.00 41,875.00
Net income
Totals
July 31, 2012
Adjusted
Trial Balance Income Statement Balance Sheet
Credit Debit Credit Debit Credit
10,510.00
4,750.00
400.00
2,475.00
6,000.00
7,080.00 7,080.00
3,600.00 3,600.00
9,000.00 9,000.00
2,000.00
21,950.00 21,950.00
2,970.00
2,550.00
1,300.00
1,060.00
3,610.00
1,450.00
1,030.00
1,470.00
225.00
75.00
75.00 75.00
170.00 170.00
41,875.00 15,740.00 21,950.00 26,135.00 19,925.00
6,210.00 6,210.00
21,950.00 21,950.00 26,135.00 26,135.00
PS Music
Worksheet
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Titles Debit Credit Debit Credit Debit
L11 Cash 10,510.00 10,510.00
L12 Accounts receivable 3,150.00 a 1,600.00 4,750.00
L14 Supplies 1,250.00 b 850.00 400.00
L15 Prepaid Insurance 2,700.00 c 225.00 2,475.00
L17 Office equipment 6,000.00 6,000.00
L21 Accounts payable 7,080.00
L23 Unearned revenue 7,200.00 a 3,600.00
L31 Pat Sharpe, Capital 9,000.00
L32 Pat Sharpe, Drawing 2,000.00 2,000.00
L41 Fees Earned 16,750.00 a 5,200.00
L50 Wages Expense 2,800.00 f 170.00 2,970.00
L51 Office rent expense 2,550.00 2,550.00
L52 equipment rent expense 1,300.00 1,300.00
L53 Utilities expense 1,060.00 1,060.00
L54 Music expense 3,610.00 3,610.00
L55 Advertising expense 1,450.00 1,450.00
L56 Supplies expense 180.00 b 850.00 1,030.00
L59 Miscellaneous expense 1,470.00 1,470.00
Totals 40,030.00 40,030.00
Insurance expense c 225.00 225.00
depreciation expense d 75.00 75.00
accumulated dep'n-OE d 75.00
wages payable f 170.00
Totals 6,520.00 6,520.00 41,875.00
Net income
Totals
July 31, 2012
Adjusted
Trial Balance Income Statement Balance Sheet
Credit Debit Credit Debit Credit
10,510.00
4,750.00
400.00
2,475.00
6,000.00
7,080.00 7,080.00
3,600.00 3,600.00
9,000.00 9,000.00
2,000.00
21,950.00 21,950.00
2,970.00
2,550.00
1,300.00
1,060.00
3,610.00
1,450.00
1,030.00
1,470.00
225.00
75.00
75.00 75.00
170.00 170.00
41,875.00 15,740.00 21,950.00 26,135.00 19,925.00
6,210.00 6,210.00
21,950.00 21,950.00 26,135.00 26,135.00
Ledger book (controlling account)
Assets
14 Cash
Date Particulars RF Debit Date Particulars RF
F 6/1 Initial Investment PS. J1 5,000.00 6/2 Office rent J1
O 6/2 Fees earned J1 3,600.00 6/6 Advertising J1
O 6/16 Fees earned-dentist J1 500.00 6/8 Equipment rent expense J1
O 6/25 Fees earned-charity J2 400.00 6/12 Music expense J1
O 6/30 Fees earned-Locclub J2 900.00 6/13 supplies on account J1
6/29 Music expense J2
6/30 Wages expense J2
Utilities expense J2
Miscellaneous expense J2
Music expense J2
Drawings J3
14 5,310.00 10,400.00
5 Accounts receivable
6/22 wedding party J2 1,250.00
3 Supplies
6/3 on account J1 350.00 6/30 J2
170.00
Liabilities
3 Accounts payable
6/13 City office supplies J1 100.00 6/4 City Office supplies J1
250.00
Capital
3 Pat Sharpe, Capital
6/1 Inv to PS Music J1
3 Pat Sharpe, Drawing
6/30 June drawings J3 500.00
Revenue
8 Fees Earned
6/2 Local radio station J1
6/16 dentist J1
6/22 wedding party J2
6/25 cancer charity ball J2
6/30 local club J2
6 Expenses
Music expense
6/12 use of cool music J1 350.00
6/29 galaxy music J1 240.00
6/30 National Music clearing J2 1,000.00
1,590.00
Office rent expense

6/2 cash paid J1 750.00

6/8 L1 700.00
Advertising expense
6/6 Local Radio L1 450.00
Wages Expense
6/30 receptionist salary J2 400.00
Utilities expense
6/30 June Utilities J2 300.00
Supplies expense
6/30 June used supplies J2 180.00
6/30 J2 300.00
L11
Credit
750.00 O
450.00 O
700.00 O
350.00 O
100.00 O
240.00 O
400.00 O
300.00 O
300.00 O
1,000.00 O
500.00 F
5,090.00
12
Credit
14
Credit
180.00
21
Credit
350.00
31
Credit
5,000.00
32
Credit
41
Credit
3,600.00
500.00
1,250.00
400.00
900.00
6,650.00
54
Credit
51
Credit
52
Credit
55
Credit
50
Credit
53
Credit
56
Credit
59
Credit
PS Music
Trial Balance
For the month ended June 30, 2012
Account Titles Debit Credit

LCash $ 5,310.00
LAccounts receivable 1,250.00
LSupplies 170.00
LAccounts payable $ 250.00
LPat Sharpe, Capital 5,000.00
LPat Sharpe, Drawing 500.00
LFees Earned 6,650.00
LWages Expense 400.00
LOffice rent expense 750.00
Lequipment rent expense 700.00
LUtilities expense 300.00
LMusic expense 1,590.00
LAdvertising expense 450.00
LSupplies expense 180.00
LMiscellaneous expense 300.00
Totals $ 11,900.00 $ 11,900.00
PS Music
Income Statement
Fees Earned $ 6,650.00

Less: Operating expenses
Music expense $ 400.00
Office rent expense 750.00
equipment rent expense 700.00
Advertising expense 300.00
Wages Expense 1,590.00
Utilities expense 450.00
Supplies expense 180.00
Miscellaneous expense 300.00 4,670.00
Net Income $ 1,980.00
PS Music
Statement of Changes in Owners' Equity
Pat Sharpe, Capital June 1, 2012 $ -

Add: Net income $ 1,980.00
Initial Investment 5,000.00 6,980.00
Total $ 6,980.00
Less: Pat Sharpe, Drawings 500.00
Pat Sharpe, Capital June 30, 2012 $ 6,480.00
PS Music
Balance Sheet
As of June 30, 2012
Assets
Current Assets
Cash $ 5,310.00
Accounts receivable 1,250.00
Supplies 170.00
Total Assets $ 6,730.00
Liabilities and Owners' Equity

Liabilities
Accounts payable $ 250.00
Owners' Equity
Pat Sharpe, Capital, June 30 , 2012 6,480.00
Total Liabilities and Owners' Equity $ 6,730.00
Direct Method
PS Music
Cash Flow Statement
Cash from Operating Activities

Cash collection from Customers 5,400.00
Cash used to pay expenses (4,590.00)
net cash from operating activities 810.00
Cash from Financing Activities

Cash invested by owner (initial investment) 5,000.00
Cash withdrawal made by owner (500.00)
Net cash from financing activities 4,500.00
Net cash from different activities 5,310.00
Add: Cash balance June 1, 2012 -
Cash balance June 30, 2012 5,310.00
Indirect method
PS Music
Cash Flow Statement

Net Income (loss) $ 1,980.00
Add (less):
non-cash transactions -
Increase in accounts receivable (1,250.00)
Increase in supplies (170.00)
Increase in accounts payable 250.00
net cash from operating activities $ 810.00
Cash investment by owner $ 5,000.00
Cash withdrawal made by owner (500.00)
Net cash from different activities $ 5,310.00
Assets
Cash
F 6/1 Initial Investment PS. J1 5,000.00 6/2 Office rent expense J1
O Fees earned J1 3,600.00 6/6 Advertising J1
Music expense J2
Drawings J3
5,310.00 10,400.00
F 7/1 add'l investment PS J3 4,000.00 7/1 office rent expense J3

O 7/2 collections J3 1,250.00 Insurance J3
O 7/3 advance payment J3 7,200.00 7/3 payment of acct. J3
O 7/11 Fees earned J3 900.00 7/4 miscellaneous J3
O 7/16 Fees earned J4 2,100.00 7/8 advertising expense J3
O 7/23 Fees earned J4 750.00 7/13 Eqpt rental expense J4
O 7/30 Fees earned J5 400.00 7/14 wages expense J4
O 7/31 Fees earned J5 2,800.00 7/21 Eqpt rental expense J4
7/22 advertising expense J4
7/27 utilities exp - electric J5
7/28 wages expense J5
7/29 miscellaneous J5
7/31 music expenses J5
7/31 drawings J5
10,510.00 19,400.00
Operating june 5,400.00 Operating - june

july 15,400.00 - july
financing - june 5,000.00 financing - june
- july 4,000.00 - july
Accounts receivable
6/22 wedding party J2 1,250.00 7/2 collections J3
7/23 party J4 1,750.00
7/30 charity ball J5 1,400.00
3,150.00 4,400.00
Supplies
6/3 on account J1 350.00 6/30 J2
170.00
6/18 on account J4 1,080.00

1,250.00
Prepaid Insurance
7/1 cash J3 2,700.00
Office equipment
7/5 One-stop-Office mart. J3 6,000.00
Liabilities
Accounts payable
250.00
7/3 payment of acct. J3 250.00 7/4 office equipment J3

7/18 supplies J4
250.00 7,080.00
Unearned revenue
7/3 advance coll-WHBD J3
Capital
Pat Sharpe, Capital
7/1 Add'l Investment J3
Pat Sharpe, Drawing

7/31 July drawings J5 1,500.00
2,000.00
Revenue
Fees Earned
6/16 dentitst J1
6/30 local club J2
7/4 J3
7/16 wedding reception J4
7/23 party J4
7/30 charity ball J5
7/31 party J5
16,750.00
Expenses
Wages Expense
7/14 receptionist & etc. J4 1,200.00
2,800.00
Office rent expense

6/2 cash paid J1 750.00
7/1 cash paid J3 1,800.00
2,550.00

6/8 J1 700.00
7/13 J3 600.00
1,300.00
Utilities expense
7/24 July electric bills J5 760.00
1,060.00
Music expense
1,590.00
7/21 Upload music J4 620.00

2,020.00
3,610.00
Advertising expense
6/6 Local Radio J1 450.00
1,450.00
Supplies expense
6/30 J2 300.00
7/4 J3 800.00
7/29 J5 370.00
1,470.00
L11
Credit
750.00 O
450.00 O
700.00 O
350.00 O
100.00 O
240.00 O
400.00 O
300.00 O
300.00 O
1,000.00 O
500.00 F
5,090.00
1,800.00 O
2,700.00 O
250.00 O
800.00 O
200.00 O
600.00 O
1,200.00 O
620.00 O
800.00 O
760.00 O
1,200.00 O
370.00 O
1,400.00 O
1,500.00 F
14,200.00
4,590.00
12,700.00
500.00
1,500.00
L12
Credit
1,250.00
1,250.00
L14
Credit
180.00
L15
Credit
L17
Credit
L21
Credit
350.00
6,000.00
1,080.00
7,080.00
L23
Credit
7,200.00
L31
Credit
5,000.00
4,000.00
9,000.00
L32
Credit
L41
Credit
3,600.00
500.00
1,250.00
400.00
900.00
6,650.00
900.00
2,100.00
2,500.00
1,800.00
2,800.00
10,100.00
L50
Credit
L51
Credit
L52
Credit
L53
Credit
L54
Credit
L55
Credit
L56
Credit
L59
Credit
PS Music
Unadjusted Trial Balance
Account Titles Debit Credit

L11 Cash 10,510
L12 Accounts receivable 3,150
L14 Supplies 1,250
L15 Prepaid Insurance 2,700
L17 Office equipment 6,000
L21 Accounts payable 7,080
L23 Unearned revenue 7,200
L31 Pat Sharpe, Capital 9,000
L32 Pat Sharpe, Drawing 2,000
L41 Fees Earned 16,750
L50 Wages Expense 2,800
L51 Office rent expense 2,550
L52 equipment rent expense 1,300
L53 Utilities expense 1,060
L54 Music expense 3,610
L55 Advertising expense 1,450
L56 Supplies expense 180
L59 Miscellaneous expense 1,470
Totals 40,030 40,030
PS Music
Income Statement
For the two month ended July 31, 2012
Unadjusted Adjusted
Fees Earned 16,750.00 21,950.00

Wages Expense 2,800.00 2,970.00
Office rent expense 2,550.00 2,550.00
equipment rent expense 1,300.00 1,300.00
Utilities expense 1,060.00 1,060.00
Music expense 3,610.00 3,610.00
Advertising expense 1,450.00 1,450.00
Supplies expense 180.00 1,030.00
Miscellaneous expense 1,470.00 1,470.00
14,420.00 15,440.00
Net Income 2,330.00 6,510.00
PS Music
Pat Sharpe, Capital June 1, 2012 -

Add: Net income 2,330.00
Additional Investment 9,000.00 11,330.00
Total 11,330.00
Less: Pat Sharpe, Drawings 2,000.00
Pat Sharpe, Capital July 31, 2012 9,330.00
PS Music
Balance Sheet
As of July 31, 2012
Assets
Current Assets
Cash 10,510.00
Supplies 1,250.00
Prepaid Insurance 2,700.00 17,610.00
Non Current Assets
Office equipment 6,000.00
Total Assets 23,610.00

Liabilities
Accounts payable 7,080.00
Unearned revenues 7,200.00 14,280.00
Owners' Equity
Pat Sharpe, Capital, July 31 , 2012 9,330.00
Total Liabilities and Owners' Equity 23,610.00
Direct Method
PS Music
Cash Flow Statement

Cash from Customers 20,800.00
net cash from operating activities 3,510.00

Cash investment by owner 9,000.00
Cash withdrawal made by owner (2,000.00)
Indirect method
PS Music
Cash Flow Statement

Add (less):
Increase in supplies (1,250.00)
Increase In prepaid insurance (2,700.00)
Increase in accounts payable (for operations only) 1,080.00
increase in unearned rent 7,200.00
net cash from operating activities $ 3,510.00
Cash balance June 30, 2012 $ 10,510.00
Assets
Cash
Music expense J2
Drawings J3
5,310.00 10,400.00

7/31 drawings J5
10,510.00 19,400.00
Accounts receivable
7/23 party J4 1,750.00
3,150.00 4,400.00
Supplies
6/3 on account J1 350.00 6/30 J2
170.00
6/18 on account J4 1,080.00

1,250.00
Prepaid Insurance
7/1 cash J3 2,700.00
Office equipment
Accumulated depreciation - Office equipment

-
Liabilities
Accounts payable
250.00

7/18 supplies J4
250.00 7,080.00
Wages payable
Unearned revenue
7/3 advance coll-WHBD J3
Capital
Pat Sharpe, Capital
Pat Sharpe, Drawing

2,000.00
Revenue
Fees Earned
6/16 dentitst J1
6/30 local club J2
7/4 J3
7/23 party J4
7/31 party J5
16,750.00
Expenses
Wages Expense
2,800.00
Office rent expense

6/2 cash paid J1 750.00
7/1 cash paid J3 1,800.00
2,550.00

6/8 J1 700.00
7/13 J3 600.00
1,300.00
Utilities expense
1,060.00
Music expense
1,590.00

2,020.00
3,610.00
Advertising expense
1,450.00
Supplies expense
Insurance expense
Depreciation expense
6/30 J2 300.00
7/4 J3 800.00
7/29 J5 370.00
1,470.00
L11
Credit
750.00 O
450.00 O
700.00 O
350.00 O
100.00 O
240.00 O
400.00 O
300.00 O
300.00 O
1,000.00 O
500.00 F
5,090.00
1,800.00 O
2,700.00 O
250.00 O
800.00 O
200.00 O
600.00 O
1,200.00 O
620.00 O
800.00 O
760.00 O
1,200.00 O
370.00 O
1,400.00 O
1,500.00 F
14,200.00
L12
Credit
1,250.00
1,250.00
L14
Credit
180.00
L15
Credit
L17
Credit
L18
Credit
L21
Credit
350.00
6,000.00
1,080.00
7,080.00
L22
Credit
L23
Credit
7,200.00
L31
Credit
5,000.00
4,000.00
9,000.00
L32
Credit
L41
Credit
3,600.00
500.00
1,250.00
400.00
900.00
6,650.00
900.00
2,100.00
2,500.00
1,800.00
2,800.00
10,100.00
L50
Credit
L51
Credit
L52
Credit
L53
Credit
L54
Credit
L55
Credit
L56
Credit
L57
Credit
L57
Credit
L59
Credit
PS Music
Income Statement
Fees Earned $ 21,950.00

Music expense $ 3,610.00
Wages Expense 2,970.00
Office rent expense 2,550.00
Miscellaneous expense 1,470.00
Advertising expense 1,450.00
equipment rent expense 1,300.00
Utilities expense 1,060.00
Supplies expense 1,030.00
Insurance expense 225.00
depreciation expense 75.00 15,740.00
Net Income $ 6,210.00
PS Music
Pat Sharpe, Capital June 1, 2012 $ -

Add: Net income $ 6,210.00
Additional Investment 9,000.00 15,210.00
Total $ 15,210.00
Less: Pat Sharpe, Drawings 2,000.00
Pat Sharpe, Capital July 31, 2012 $ 13,210.00
PS Music
Balance Sheet
As of July 31, 2012
Assets
Current Assets:
Cash $ 10,510.00
Supplies 400.00
Prepaid Insurance 2,475.00 $ 18,135.00
Non Current Assets:
Less: Accumulated depreciation 75.00 5,925.00
Total Assets $ 24,060.00

Liabilities
Accounts payable $ 7,080.00
Unearned revenues 3,600.00
Wages payable 170.00 $ 10,850.00
Owners' Equity
Pat Sharpe, Capital, July 31 , 2012 13,210.00
Total Liabilities and Owners' Equity $ 24,060.00
Direct Method
PS Music
Cash Flow Statement

Cash from Customers 20,800.00
net cash from operating activities 3,510.00

Cash investment by owner 9,000.00
Cash balance July 31, 2012 10,510.00
Indirect method
PS Music
Cash Flow Statement

Add (less):
Increase in supplies (400.00)
Increase In prepaid insurance (2,475.00)
Increase in accounts payable (for operations only) 1,080.00
increase in unearned rent 3,600.00
net cash from operating activities $ 3,265.00
Cash balance June 30, 2012 $ 10,265.00
Assets
Cash
Music expense J2
Drawings J3
5,310.00 10,400.00

7/31 drawings J5
10,510.00 19,400.00
Accounts receivable
7/23 party J4 1,750.00
3,150.00 4,400.00
7/31 adjustment J5 1,600.00
Supplies
6/3 on account J1 350.00 6/30 J2
170.00
6/18 on account J4 1,080.00

1,250.00
7/31 adjustment July J5
Prepaid Insurance
7/1 cash J3 2,700.00 7/31 adjustments J5
Office equipment
Accumulated depreciation - Office equipment

- 7/31 adjustments
Liabilities
Accounts payable
250.00

7/18 supplies J4
250.00 7,080.00
Wages payable
7/31 adjustment
Unearned revenue
7/31 adjustment J6 3,600.00 7/3 advance coll-WHBD J3
Capital
Pat Sharpe, Capital
Pat Sharpe, Drawing

2,000.00
Revenue
Fees Earned
6/16 dentitst J1
6/30 local club J2
7/4 J3
7/23 party J4
7/31 party J5
16,750.00
7/31 adjustment J5
21,950.00
Expenses
Wages Expense
2,800.00
7/31 adjustment J5 170.00
2,970.00
Office rent expense

6/2 cash paid J1 750.00
7/1 cash paid J3 1,800.00
2,550.00

6/8 J1 700.00
7/13 J3 600.00
1,300.00
Utilities expense
1,060.00
Music expense
1,590.00

2,020.00
3,610.00
Advertising expense
1,450.00
Supplies expense
7/3 July used supplies J5 850.00
Insurance expense
7/31 adjustment - July J5 225.00
Depreciation expense
7/31 adjustment 75.00
6/30 J2 300.00
7/4 J3 800.00
7/29 J5 370.00
1,470.00
L11
Credit
750.00 O
450.00 O
700.00 O
350.00 O
100.00 O
240.00 O
400.00 O
300.00 O
300.00 O
1,000.00 O
500.00 F
5,090.00
1,800.00 O
2,700.00 O
250.00 O
800.00 O
200.00 O
600.00 O
1,200.00 O
620.00 O
800.00 O
760.00 O
1,200.00 O
370.00 O
1,400.00 O
1,500.00 F
14,200.00
L12
Credit
1,250.00
1,250.00
L14
Credit
180.00
850.00
L15
Credit
225.00
L17
Credit
L18
Credit
75.00
L21
Credit
350.00
6,000.00
1,080.00
7,080.00
L22
Credit
170.00
L23
Credit
7,200.00
L31
Credit
5,000.00
4,000.00
9,000.00
L32
Credit
L41
Credit
3,600.00
500.00
1,250.00
400.00
900.00
6,650.00
900.00
2,100.00
2,500.00
1,800.00
2,800.00
10,100.00
5,200.00
L50
Credit
L51
Credit
L52
Credit
L53
Credit
L54
Credit
L55
Credit
L56
Credit
L57
Credit
L57
Credit
L59
Credit
PS Music
Post - closing Trial Balance
Debit Credit
Cash 10,510.00
Supplies 400.00
Prepaid Insurance 2,475.00
accumulated dep'n-OE 75.00
Accounts payable 7,080.00
Unearned revenue 3,600.00
wages payable 170.00
Pat Sharpe, Capital 13,210.00
Totals 24,135.00 24,135.00
accrual the act of accumulating
a method of accounting in which

each item is entered as it is earned
accrual
or incurred regardless of when
basis actual payments are received or
made
deferral a state of abeyance or suspended business

act of putting off to a future time
put off to later

postponed.

PSMusic Compreprob

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Assets = Liabilities + Owner's Equity

A S S E T S = LIABILITIES + CAPITAL - Drawing +

3,600 350 - 750 - 700 - 450

6,650 1,590 - 750 - 700 - 450 - 400 - 300 - 180 - 300

2 Cash L11 3,600.00

Office rent expense L51 750.00

4 Supplies L14 350.00

6 Advertising expense L55 450.00

8 Equipment rent expense L52 700.00

12 Music expense L54 350.00

13 Accounts payable L21 100.00

16 Cash L11 500.00

25 Cash L11 400.00

29 Music expense L54 240.00

30 Cash L11 900.00

Wages expense L50 400.00

Utilities expense L53 300.00

Supplies expense L56 180.00

Miscellaneous expense L59 300.00

Music expense L54 1,000.00

July 1 Cash L11 4,000.00

Office rent expense L51 1,800.00

Prepaid Insurance L15 2,700.00

2 Cash L11 1,250.00

3 Cash L11 7,200.00

Accounts payable L21 250.00

4 Miscellaneous expense L59 800.00

5 office equipment L17### 6,000.00

11 Cash L11 900.00

13 Equipment rental expense L52 600.00

14 Wages expense L50 1,200.00

16 cash L11 2,100.00

18 Supplies L14 1,080.00

21 Music expense L52 620.00

22 Advertising expense L55 800.00

23 Cash L11 750.00

28 Wages expense L50 1,200.00

29 Miscellaneous expense L59 370.00

31 Cash L11 2,800.00

Music expense L54 1,400.00

Pat Sharpe, Drawings L32 1,500.00

a Unearned revenue L23 3,600.00

c Insurance expense L57 225.00

d Depreciation expense L57 75.00

f Wages expense L51 170.00

Income summary 15,740.00

Pat Sharpe, Capital 2,000.00

Wages payable 170.00

Office rent expense

equipment rent expense

Account Titles Debit Credit

Fees Earned $ 6,650.00

Pat Sharpe, Capital June 1, 2012 $ -

Liabilities and Owners' Equity

Cash from Operating Activities

Cash from Financing Activities

Cash from Operating Activities