Revenues:
Service Revenue $5500
Less Expenses:
Salaries expenses 1800
Lease expenses 400
Repair expenses 300
Depreciation expense trailer 100
Loan expenses 600
EAN 2300
Robert Lawn Service
Statement of Owner’s Equity
August 31 XXXX
Investment by owner 400
Withdrawals (500)
EAN 2300
Owner’s equity August 31, 2200
Robert Lawn Service
Statement of Owner’s Equity
August 31 XXXX
Assets Liabilities
Cash 1200 (600+200+400) Accounts payable 450 (400+50)
Accounts receivable 750 Salaries payable 300
Trailer 200 (300-100) Owner’s equity capital 2200
TOTAL ASSETES 2150 TOTALS LIABILITIES+OWNER’S EQUITY 2950
Doug Maltbee formed a lawn service business as a summer job. To start the business on May 1, he deposited $1,000 in a new bank account in the name of the proprietorship. The $1,000 consisted of a $600 loan from his father and $400 of his own money. Doug rented lawn equipment, purchased supplies, and hired fellow students to mow and trim his customer's lawns.
At the end of each month, Doug mailed bills to his customers. On August 31, he was ready to dissolve the business and return to Louisiana State University for the fall semester. Because he was so busy, he kept few records other than his checkbook and a list of amounts owed to him by customers.
At August 31, Doug's checkbook shows a balance of $690, and his customers still owe him $500. During the summer, he collected $4,250 from customers. His checkbook lists payments for supplies totaling $400, and he still has gasoline, weedeater cord, and other supplies that cost a total of $50. He paid his employees $1,900, and he still owes them $200 for the final week of the summer.
Doug rented some equipment from Scholes Machine Shop. On May 1, he signed a six-month lease on mowers and paid $600 for the full lease period. Scholes will refund the unused potion of the prepayment if the equipment is in good shape. To get the refund, Doug has kept the mower in excellent condition. In fact, he had to pay $300 to repair a mower.
To transport employees and equipment to jobs, Doug used a trailer that he bought for $300. He figures that the summer's work used up one-third of the trailer's service potential. The business checkbook lists a payment of $460 for cash withdrawals by Doug during the summer. Doug paid his father back during August.
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