MGT 1104 – UNGRADED ACCOUNTING EXERCISE FOR HOMEWORK
Larry has been in business for himself for some time, having formed an LLC. As of the start of August, the
balance sheet of the LLC was as follows:
Assets
Cash in Bank
Accounts Receivable
Property and Equipment
$8,000
$12,000
$10,000
Liabilities
Accounts Payable
Business Loan Payable
Owner’s Equity
$6,000
$8,000
$16,000
The following transactions take place in the LLC in the current month:







On August 31, pays Larry a salary of $4,000 for work performed during the month
Pays 50% of the accounts payable due at the end of last month
Hires a new employee who will start work in October, pays an up-front signing bonus of $1,000.
Buys office supplies for $1,000, which will be paid for on September 15.
Collects $8,000 of the amounts due at the end of the last month.
Makes a $1,000 payment on the business loan, which is interest free until the end of the year.
Bills $6,000 to clients which will not be paid until 60 days from the date of invoice.
Note: The grid structure present in the previous practice problems is not provided in order to encourage
you to create it yourself and not rely on the solution.
MGT 1104 – UNGRADED ACCOUNTING EXERCISE FOR HOMEWORK
ANSWER KEY
Balance Sheet
Assets
Cash
$7,000
Accounts Receivable
$10,000
Property
$10,000
Total Assets
$27,000
Liabilities and Owner’s Equity
Accounts Payable
$4,000
Loan Payable
$7,000
Owner’s Equity
$16,000
Total Liabilities and Owner’s Equity
$27,000
Income Statement
Revenues
$6,000
Expenses
-
Salaries and Wage
Office Supplies
Net Income #
# ignores taxes for simplicity
$5,000
$1,000
$0