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Carla Mc Coy Group Project 3
 

Carla Mc Coy Group Project 3

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Income Statement

Income Statement

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    Carla Mc Coy Group Project 3 Carla Mc Coy Group Project 3 Document Transcript

    • Maltbee Lawn Service Balance Sheet as of August 31st Cash 690 Accounts Receivable 500 Supplies on Hand 50 Prepaid Lease 200 Trailer 300 Depreciation 100 200 Total Assets 1640 Liabilities Wages Payable 200 Owners Equity 1440 Total Liabilities 1640 Maltbee Lawn Service Income Statement For period ending May through August Service Revenue 4750 ($4250 plus $500 owed) Wages 2100 ($1900 paid plus $200 outstanding) Supplies 350 (Total payments $400 minus $50 supplies on hand) Repairs 300 Equipment Loss 400 ($600 minus $200 for 2 months lease) Depreciation 100 (1/3 service life used up) Total Expenses 3250 Net Income 1500 Doug Maltbee's summer work was successful in my opinion The reason I say it was successful is because anytime you ar a business you are going to have to spend in order to earn a his total expenses outweigh his Net income, it gives room f Maltbee Lawn Service quarter to be viewed. It's hard to say based on a few month Owners Equity not the business will be a complete success or not, but if giv and making sure the equipment and finances are distribute Capital Contribution 400 cost wise there should be no reason why Doug Maltbee's b Net Income 1500 succeed. 1900 Doug Maltbee probably would have done good to get a sm Less Drawings 460 business loan for his business to start out and keep in mind may be overspending. I also feel he needs to have an Emerg Balance as of Aug 31st 1440 set aside for time that has to be taken off, or for things that that he can not currently fix with the other income he may serveral things to think about and consider when starting a
    • The steps for the accounting cycle have been sheet 2 for review.
    • s summer work was successful in my opinion. y it was successful is because anytime you are beginning are going to have to spend in order to earn and even though ses outweigh his Net income, it gives room for the next iewed. It's hard to say based on a few months as to whether or ss will be a complete success or not, but if given the time and effort re the equipment and finances are distributed accordingly e should be no reason why Doug Maltbee's business should not probably would have done good to get a small or his business to start out and keep in mind to recognize when he ending. I also feel he needs to have an Emergency fund me that has to be taken off, or for things that need to be fixed t currently fix with the other income he may have. There are to think about and consider when starting a business.
    • The steps for the accounting cycle have been uploaded on sheet 2 for review.
    • The steps in the Accounting Cycle are listed as follows: Step 1 - Analyzing Transactions ~ This is where documents show and describe the transactions and events which can eith electronic. Some good examples of source documents are checks, bank statements, and purchase orders. Step 2 - Journalizing ~ Once journalizing takes place it's considered to be double entry accounting which is where each a recorded in at least two accounts or where the debits require to be equal to credits. Once the rules of debits and credits transactions should be recorded in a journal to give a complete record of each transaction. Step 3 - Posting ~ This is where information from the journal is transferred to a ledger. A ledger is a collection of all acco number detail about a company's accounts. In order to verify that the company's debits equal the credits, there has to b balance prepared. Once this is prepared this is where you list all accounts and balances at a point in time. Step 4 - Prepare an Unadjusted Trial Balance ~ Any information that is used in the trial balance has come from the ledge to create the trial balance which is called an unadjusted trial balance. Debit amounts are on the left side, where Credit a side and both must equal one another. If for any reason it comes out unequal then it is investigated or corrected before step of the accounting cycle. Step 5 - Prepare Adjustments ~ This involves bringing an asset or liability account balance to its proper amount among u correspoinding revenue or expense account. Adjusting entries should be recorded in the journal and then the ledger and should be made at the end of the accounting time period. Once they have been posted, then the accountant should pre which is always prepared after the adjusting entries. The trial balance is to verify that debits equal all credits and to pre Step 6 - Prepare Adjusted Trial Balance ~ This is where assets, liabilities, owner's equity, revenues, and expenses would made in previous steps. Step 7 - Prepare Financial Statements ~ This is the primary outputs of the financial accounting system. Step 8 - Prepare closing Entries ~ These are prepared after all financial statements are completed. The purpose of closin accounts for recording transactions and events for the next period. This is where the accountant is getting the books rea Step 9 - Prepare a Post - Closing Trial Balance ~ This should only contain the debit and credit balance for permanent acco the only accounts remaining after the closing process. Not all companies do this step, but many of them do. This also en credits and that temporary accounts have a zero balance. Step 10 - Reversing Entries ~ Some companies will complete this step in their accounting cycle (This step is optional) Th reverse certain adjustments in the next period. For most people, reversing entries will not be covered by an accounting Tip: One thing to keep in mind is that when you have a computerized accounting system, then the need to test for equa normally not required because the systems will test this on the amounts as they are entered. If someone tried to put in unequal then the system would not accept the input. Human judgement is still required in determining adjustements ne Reference Horngren, C (2007) Accounting.(7th edition). Prentice Hall, Upper Saddle River, New Jersey
    • sactions and events which can either be hard copy or nd purchase orders. accounting which is where each and every transaction are nce the rules of debits and credits are applied then the . A ledger is a collection of all accounts and shows the ts equal the credits, there has to be an unadjusted trial s at a point in time. balance has come from the ledger. The balances are used re on the left side, where Credit amounts are on the Right s investigated or corrected before proceeding to the next nce to its proper amount among updating the he journal and then the ledger and all adjusting entries d, then the accountant should prepare another trial balance debits equal all credits and to prepare financial statements. y, revenues, and expenses would reflect any adjustments ounting system. completed. The purpose of closing entries prepares the ccountant is getting the books ready for the next year. credit balance for permanent accounts because these are but many of them do. This also ensures that all debits equal ing cycle (This step is optional) The entries made here not be covered by an accounting instructor. em, then the need to test for equality of debits and credits is ntered. If someone tried to put in something that was ed in determining adjustements needed. Upper Saddle River, New Jersey