Joan Robinson opens her own law office on July 1, 2010.

During the first month of operations, the

following transactions occurred.

1. Joan invested $11,000 in cash in the law practice.

2. Paid $800 for July rent on office space.

3. Purchased office equipment on account $3,000.

4. Provided legal services to clients for cash $1,500.

5. Borrowed $700 cash from a bank on a note payable.

6. Performed legal services for client on account $2,000.

7. Paid monthly expenses: salaries $500, utilities $300, and telephone $100.

8. Joan withdraws $1,000 cash for personal use

Instructions

(a) Prepare a tabular summary of the transactions.

(b) Prepare the income statement, owner’s equity statement, and balance sheet at July 31 for Joan
Robinson, Attorney.

JOAN ROBINSON, LAW FIRM

Summary of Transactions
July 1, 2017 to July 31,
2017
Assets Liabilities Equity
Accounts Accounts
Cash Equipment Joan's Capital
Receivable Payable
11,000 11,000 Investment
(800) (800) Expense
3,000 3,000 Equipment purchase
1,500 1,500 Revenue
700 700 Bank Loan
2,000 2,000 Revenue
(900) (900) Salaries & Advertising
(1,000) (1,000) Withdraw
10,500 2,000 3,000 3,700 11,800
15,500 15,500
 JOAN ROBINSON, LAW FIRM
Income Statement
Month Ended July 31, 2017
Revenues:
Services Revenue 3,500
Expenses:
Office Rent 800
Salaries 500
Utilities 300
Advertising 100
Total Expenses 1,700
Net Income 1,800

JOAN ROBINSON, LAW FIRM

Owner's Equity Statement
Month Ended July 31, 2017
Joan's Capital July 1 -
Add: Investments 11,000
Net Income 1,800

Less: Drawings (1,000)

Joan's Capital July 31 11,800

JOAN ROBINSON, LAW FIRM

Balance Sheet
July 31, 2017
Assets Liabilities and Owners Equity
Cash 10,500 Account Payable 3,000
Accounts Receivable 2,000 Notes Payable 700
Equipment 3,000 Owners Capital 11,800
Total 15,500 Total 15,500

Q 2: Judi Salem opened a law office on July 1, 2018. On July 31, the balance sheet showed Cash
$5,000, Account Receivable $1,500, Supplies $500, Equipment $6,000, Accounts Payable
$4,200 and Owner's Capital $8,800. During August, the following transactions occurred:

1. Collected $1,200 of accounts receivable.

2. Paid $2,000 cash on accounts payable.
3. Recognized revenue of $7,500 of which $3,000 is collected in cash and the balance is due
in September
 4. Purchased additional equipment for $2,000, paying $400 in cash and the balance on
account.
5. Paid Salaries $2,500 rent for August $900, and advertising expenses $400.
6. Withdrew $700 cash for personal use
7. Received $2,000 from Standard Federal Bank--money borrowed on a note payable.
8. Incurred utility expenses for month on account $270.

Instructions

i. Prepare a tabular analysis of the August transactions beginning with July 31 balances.
The column headings should be as follows: Cash + Accounts Receivable + Supplies +
Equipment = Notes Payable + Accounts Payable + Owner's Capital - Owner's Drawings
+ Revenues - Expenses.
ii. Prepare an income statement for August, an owner's equity statement for August, and a
balance sheet at August 31.