Susan Huang began the practice of law October 1, 2020, with an initial investment of $10,500 in cash. She made no withdrawals during the month. After completing the first month of practice, the financial statements were prepared by Ryan Player, the secretary/bookkeeper Ms. Huang had hired. Ms. Huang almost burst out laughing when she saw them. She had completed a course in legal accounting in law school and knew the statements prepared by Player left much to be desired. Consequently, she asked you to revise the statements. The Player version is presented as follows: Susan Huang, Lawyer Balance Sheet October 31, 2020 Assets Liabilities and Equity $ 3,780 Susan Huang, capital $ 10,500 Cash Furniture 2,100 420 Supplies expense Accounts payable Rent expense 1,050 2,100 Supplies 1,050 $ 10,500 $ 10,500 Susan Huang, Lawyer Income Statement For Month Ended October 31, 2020 Revenues: $ 11,550 2,100 Legal revenue Accounts receivable $ 13,650 Expenses: Salaries expense Telephone expense Law library $ 2,940 210 8,400 11,550 Profit $ 2,100

Susan Huang began the practice of law October 1, 2020, with an initial investment of $10,500 in cash. She made no withdrawals during the month. After completing the first month of practice, the financial statements were prepared by Ryan Player, the secretary/bookkeeper Ms. Huang had hired. Ms. Huang almost burst out laughing when she saw them. She had completed a course in legal accounting in law school and knew the statements prepared by Player left much to be desired. Consequently, she asked you to revise the statements. The Player version is presented as follows: Susan Huang, Lawyer Balance Sheet October 31, 2020 Assets Liabilities and Equity $ 3,780 Susan Huang, capital $ 10,500 Cash Furniture 2,100 420 Supplies expense Accounts payable Rent expense 1,050 2,100 Supplies 1,050 $ 10,500 $ 10,500 Susan Huang, Lawyer Income Statement For Month Ended October 31, 2020 Revenues: $ 11,550 2,100 Legal revenue Accounts receivable $ 13,650 Expenses: Salaries expense Telephone expense Law library $ 2,940 210 8,400 11,550 Profit $ 2,100

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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