Calculate total assets and total liabilities and equity

P1-46A

Angela Petrillo recently opened her own law office, which she operates as a corporation. The name of the new entity is Angela Petrillo, Attorney. Petrillo experienced the following events during the organizing phase of the new business and its first month of operation, March 2016. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business.

Requirement 1. Analyze the effects of the preceding events on the accounting equation of

Angela Petrillo, Attorney. Analyze the events chronologically, one transaction at a time. Beginning with the transaction on the 2nd, calculate the balance in each account after analyzing the effect of the transaction on the accounting equation. After calculating the ending balance of each account on the

31st, calculate total assets and total liabilities and equity.

(Complete only the necessary answer boxes for your transaction lines. [If a box is not used in the table leave the box empty; do not enter a zero for the transaction lines.] If a transaction is personal and does not affect the business, leave the transaction line blank. Carry down all balances to the "Bal." line, including zero balance accounts, entering a "0" for any zero balances. Enter a decrease in an account with a minus sign or parentheses. Abbreviations used: A/P = AccountsPayable; A/R = Accounts Receivable; Com. = Common; Contr. Cap. = Contributed Capital; Div. = Dividends; Comp. = Computer; Exp. = Expense; Liab. = Liabilities; Misc. = Miscellaneous; Rev. = Revenue; Sup. = Supplies; Util. = Utilities.)

ASSETS

LIAB.

EQUITY

Contr.

Cap.

Retained Earnings

Cash

A/R

Office

Comp.

A/P

Com.

Div.

Service

Util.

Misc.

Sup.

Stock

Rev.

Exp.

3/1

3/2

Bal.

3/3

72,000

Bal.

72,000

3/5	(350)		+		+		350		+		=		+		-		+		-		-
Bal.	71,650		+		0		+		350		+		0	=		0		+		72,000		-		0		+		0		-		0		-		0
3/7	+		+		+		5,500			=		5,500		+		-		+		-		-
Bal.	71,650	+		0		+		350		+		5,500			=		5,500		+		72,000		-		0		+		0		-		0		-		0

3/9	2,500		+		+		+		=		+		-		+		2,500		-		-
Bal.	74,150		+		0			+		350		+		5,500		=		5,500		+		72,000		-		0		+		2,500		-		0		-		0
3/15		+		+		+		=		340		+		-		+		-		-		340
Bal.		74,150		+		0	+		350		+		5,500		=		5,840		+		72,000		-		0		+		2,500		-		0		-		340

3/23	+	18,000	+	+	=	+	-	+	18,000	-	-
Bal.	74,150	+	18,000	+	350	+	5,500	=	5,840	+	72,000	-	0	+	20,500	-	0	-	340
3/28	(340)	+	+	+	=	(340)	+	-	+	-	-
Bal.	73,810	+	18,000	+	350	+	5,500	=	5,500	+	72,000	-	0	+	20,500	-	0	-	340

3/30	(1,300)		+		+	+	=	+	-	+	-	1,300	-
Bal.	72,510		+		18,000	+	350	+	5,500	=	5,500	+	72,000	-	0	+	20,500	-	1,300	-	340
3/31	1,800	+		(1,800)		+	+	=	+	-	+	-	-
Bal.	74,310	+		16,200		+	350	+	5,500	=	5,500	+	72,000	-	0	+	20,500	-	1,300	-	340

3/31	(2,000)	+	+	+	=		+	-	2,000	+	-	-
Bal.	72,310	+	16,200	+	350	+	5,500		=		5,500	+	72,000	-	2,000	+	20,500	-	1,300	-	340
Tot.	$94,360							=		$94,360

Requirement 2. Prepare the financial statements.

Income statement. (If a box is not used in the table leave the box empty; do not select a label or enter a zero.)

Review the ending balances of the accounts from Requirement 1.

Angela Petrillo, Attorney
Income Statement
Month Ended March 31, 2016
Revenues:
Service Revenue	$20,500
Expenses:
Miscellaneous Expense	$340
Utilities Expense	1,300
Total Expenses	1,640
Net Income	$18,860

Statement of retained earnings.

Enter any increases in retained earnings prior to the subtotal and any decreases to retained earnings below the subtotal. (Enter a "0" for any zero balances. Use a minus sign or parentheses to show a decrease in retained earnings.)

Review the ending balances of the accounts from Requirement 1.

Angela Petrillo, Attorney
Statement of Retained Earnings
Month Ended March 31, 2016
Retained Earnings, March 1, 2016	$0
Net income for the month	18,860
18,860
Dividends	(2,000)
Retained Earnings, March 31, 2016	$16,860

Balance sheet. (If a box is not used in the table leave the box empty; do not select a label or enter a zero.)

Review the ending balances of the accounts from Requirement 1.

Angela Petrillo, Attorney
Balance Sheet
Assets		Liabilities
Cash	$72,310	Accounts Payable	$5,500
Accounts Receivable	16,200	Stockholders' Equity
Office Supplies	350	Common Stock	72,000
Computer	5,500	Retained earnings	16,860
Total Stockholders' Equity	88,860
Total Assets	$94,360	Total Liabilities and Stockholders' Equity	$94,360

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