RECORDING BUSINESS
TRANSACTIONS
Jim's Lawn Care
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Jim Hamilton began a lawn care business in May
by
depositing $800 in a business bank account.
Purchased lawnmowers and other lawn
equipment on
account, $1,000.
Paid cash for supplies, $50.
Performed lawn care services for credit
customers
and billed them $700.
Received $700 cash from the customers billed in #4.
Paid $1,000 cash for the lawn equipment purchased in
#2.
Paid for an advertisement in a local newspaper, $150.
Performed lawn care services for cash customers and
immediately received $420.
Paid wages to a part-time assistant, $85.
Performed lawn care services for credit
customers
and billed them $600.
Received an invoice from Gas-n-Go for gasoline
purchased on account during May, $110. The
invoice
will not be paid until next month.
At the end of May, Jim withdrew $100 from the business
for personal use.
RECORDING BUSINESS TRANSACTIONS
Jim’s Lawn Care  Solution
1.
Bal.
2.
Bal.
3.
Bal.
4.
Bal.
5.
Bal.
6.
Bal.
7.
Bal.
8.
Bal.
9.
Bal.
10.
Bal.
11.
Bal.
12.
Bal.
Cash
+ 800
800
Accounts
Receivable
635
635
- 100
535
Lawn
Equipment
Accounts
Payable
+ 1,000
1,000
+ 1,000
1,000
+50
50
1,000
1,000
50
1,000
1,000
50
1,000
50
1,000
1000
- 1,000
0
50
1,000
50
1,000
50
1,000
+ 600
600
50
1,000
600
50
1,000
+ 110
110
600
50
1,000
110
800
- 50
750
750
+700
1,450
- 1,000
450
- 150
300
+ 420
720
- 85
635
Supplies
+ 700
700
-700
0
J. Hamilton,
Capital
+ 800
800
Investment
800
800
+ 700
1,500
Revenue
1,500
1,500
-150
1,350
+ 420
1,770
- 85
1,685
+ 600
2,285
- 110
2,075
- 110
2,075
Adv. Exp.
Revenue
Wage Exp.
Revenue
Gas Exp.
Withdrawal
FINANCIAL STATEMENTS–––SOLUTIONS
Jim's Lawn Care
Income Statement
For the Month Ended May 31, 20–––
____________________________________________________________
Fees earned
$1,720
Operating expenses:
Advertising expense
$150
Gasoline expense
110
Wages expense
85
Total operating exp.
345
Net income
$1,375
Jim's Lawn Care
Statement of Owner's Equity
For the Month Ended May 31, 20–––
____________________________________________________________
Jim Hamilton, Capital
$
0
Investment
$ 800
Net income for May
1,375
$2,175
Less withdrawals
100
Increase in owner's equity
2,075
Jim Hamilton, capital, May 31
$2,075
Jim's Lawn Care
Balance Sheet
May 31, 20–––
____________________________________________________________
Assets
Liabilities
Cash
$ 535
Accounts payable
$ 110
Accounts receivable 600
Supplies
50
Owner’s equity
Lawn equipment
1,000
Jim Hamilton, capital
2,075
Total assets
$2,185
Total liabilities and
owner’s equity
$2,185