IENG377 Engineering Economy
Homework: From Engineering Economy, Sullivan, Pearson
Jill Smith starts an apartment locator business that has the following transactions in the first month:
a) Smith invests $35,000 of personal funds to start the business.
b) She purchases on account office supplies costing $350.
c) She pays cash of $30,000 to acquire a lot next to the campus. This will be the future home of
the business.
d) Smith locates apartments for client and receives cash of $1900.
e) Smith pays $100 of the account payable she created in transaction (b).
f) She pays $2000 of personal funds for a vacation.
g) She pays cash for expenses for office rent, $400, and utilities, $100.
h) The business sells office supplies to another business for its cost of $150.
i) Smith with drawls cash of $1200 personal use.
Account for these transactions and create a balance sheet as of the end of the month and income
statement for the month on the next page.
Accounting for the Transactions:
a
b
c
d
e
f
g
h
i
Assets
Cash
Office
Supplies
Land
Liabilities
Accounts
Payable
Owner’s
Equity
Balance Sheet at Month End
$ Amount
Liabilities and Owners
Equity
S Amount
Cash
$
Accounts Payable
$
Office Supplies
$
Owner’s Equity
$
Land
$
Total
$
Assets
Total
$
Income Statement for end of Month
$ Operating Revenue (for finding apartments)
$
Less Rent Cost
$
Less Utilities Cost
$
Net Income
$
j
Balance
Month
End