Balance sheet Income Statement

Assets Liabilities Contributed Retained Revenues Expenses = Net

Capital Earnings Income
Cash Accounts Inventory Prepaid rent PP&E Accumulated Note Accounts COGS Rent Depreciation
receivables depreciation (CA) payable payable
Transactions
Entry Transactions Debit Credit
no.
1 Cash 400,000
Paid-in-capital 400,000
(Capital stock issued to Lopez)
2 Cash 100,000
Notes payable 100,000
(Borrowed at 9% interest on a one-year note)
3 Store equipment 15,000
Cash 15,000
(Acquired store equipment for cash)
4 Inventory 120,000
Cash 120,000
(Acquired inventory for cash)
5 Inventory 10,000
Accounts payable 10,000
(Acquired inventory on credit)
6 Inventory 30,000
Cash 10,000
Accounts payable 20,000
(Acquired inventory for cash plus credit)
7 Cash 1,000
Equipment 1,000
(Sold store equipment to business neighbor)
8 Accounts payable 800
Inventory 800
(Returned some inventory to supplier)
9 Accounts payable 4,000
Cash 4,000
(Payments to suppliers)
10a Accounts receivables 160,000
Sales 160,000
(Sold goods of credit)
10b Cost of goods sold 100,000
Inventory 100,000
(Record cost of goods sold)
11 Cash 5,000
Accounts receivable 5,000
(Received cash from AR)
12 Prepaid rent 6,000
Cash 6,000
(Paid 3 months rent in advance)
13 Rent expense 2,000
Prepaid rent 2,000
(Record rent expense for the month )
14 Depreciation expense 100
Accumulated depreciation 100
( Record depreciation expense for the month)
 Cash Inventory Equipment Accounts receivable Prepaid rent
Debits Credits Debits Credits Debits Credits Debits Credits Debits Credits
1 400,000 15,000 3 4 120000 800 8 3 15,000 1,000 7 10a 160000 5000 11 12 6,000 2,000 13
2 100,000 120,000 4 5 10000 100,000 10b
7 1,000 10,000 6 6 30000
11 5,000 4,000 9
6,000 12

351,000 59,200 14,000 155,000 4,000

Notes payable Accounts payable Paid-in-capital

Debits Credits Debits Credits Debits Credits
100,000 2 8 800 10,000 5 400000 1 1
9 4,000 20,000 6

100,000 25,200 400,000

Sales revenue COGS Depreciation Accu.Depreciation Rent expense

Debits Credits Debits Credits Debits Credits Debits Credits Debits Credits
160,000 10a 10b 100000 14 100 100 14 13 2000

160,000 100,000 100 100 2,000

Trial balance
Transactions Debit Credit
Cash 351,000
Inventory 59,200
Equipment 14,000
Receivables 155,000
Prepaid rent 4,000
Notes payable 100,000
Accounts payable 25,200
Paid-in-capital 400,000
Sales 160,000
COGS 100,000
Depreciation 100
Accumulated depreciation 100
Rent expense 2,000
685,300 685,300
Income statement Balance sheet
Sales 160,000 Assets
COGS (100,000) Cash 351,000 500,000
Rent expense (2,000) Inventory 59,200
Depreciation (100) Equipment 14,000
Net income 57,900 Less: Accumulated depreciation (100)
Equipment, net 13,900
Receivables 155,000
Beginning RE 0 Prepaid rent 4,000
Net income 57,900 Total assets 583,100 500,000
Dividends 0
Closing RE 57,900 Liabilities and Equity
Accounts payable 25,200
Notes payable 100,000 100,000
Total liabilities 125,200 100,000

Shareholders' equity
Par and paid-in-capital 400,000 400,000
RE 57,900 -
Total SE 457,900 400,000

Total liabilities and SE 583,100 500,000