Thursday, September 7, 2023 8:38 AM

Sole proprietorship Partnership Corporation

Number of owners 1 >=2 >=2

Legal Status No No Yes

Corporation tax No No Yes
Personal tax Yes Yes Yes

Transaction 1:
Cash Supplies Equipment Account Payable Equity Revenues Expenses
Taylors invests $30,000 cash set up a business
Equity --> Owner's capital: increase
Assets --> Cash: increase +$30,000 + $30,000
Transaction 2: - $2,500 +$2,500
Purchase supplies $2,500 by cash. - $26,000 +$26,000
Assets --> (Cash : Decrease & Supplies: Increase
Transaction 3: + 7,100 + $7,100
Purchase equipment for cash $26,000 + $4,200 +$4,200
Assets --> (Cash: Decrease $ Equipment: Increase)
- $1,700 + 1,700
Transaction 4:
Purchase supplies on account $ 7,100 $4,000 $9,600 $26,000 $7,100 $30,000 $4,200 $1,700
Asset --> Supplies: Increase Total Assets: $39,600 = Liabilities: $7,100 + Equity: $32,500
Liabilities --> Account Payable: Increase
Transaction 5: INCOME STATEMENT
Provides consulting service for cash $4,200
Revenues: $4,200
Asset --> Cash: Increase
Equity --> Revenues: Increase Expenses: $1,700
Transaction 6: - - Rent $1,000
Payment of expense in cash (include $1,000 rent & $700 salary) - Salary $700
Asset --> Cash: Decrease Net Profit $2,500
Equity --> Expenses (Rent & Salary): Increase
Statement of changes in Equity
- Owner's capital: $ 30,000
- Less Owner withdrawal: $0
- Add Revenues: $ 4,200
- Less Expenses: $1,700
Equity: $32,500
Balance sheet
- Cash: $ 4,000
- Supplies: $9,600
- Equipment: $ 26,000
- Total Asset: $39,600
- Account Payable: $7,100
Total Liabilities: $7,100
Owner's Capital $30,000
Net Profit $2,500
Total Equity $32,500
Total Liabilities And Equity $39,600

STATEMENT OF CASH FLOWS

Direct Indirect

Quick Notes Page 1