February 29, 2019 | March 31, 2019
Accounts payable $310,000 | $400,000
Accounts receivable 800,000 | 960,000
Cash 320,000 | 380,000
Justin Berk, capital ? | ?
Supplies 30,000 | 35,000
a. Prepare balance sheets for Ebony Interiors as of February 29 and March 31, 2019.
b. Determine the amount of net income for March, assuming that the owner made no additional investments or withdrawals during the month.
c. Determine the amount of net income for March, assuming that the owner made no additional investments but withdrew $50,000 during the month.
Answers:
a.
Cash$ 320,000
Accounts receivable800,000
Supplies30,000
Total assets$1,150,000
Accounts payable$ 310,000
Justin Berk, capital840,000
Total liabilities and owner’s equity$1,150,000
Cash$ 380,000
Accounts receivable960,000
Supplies35,000
Total assets$1,375,000
Accounts payable$ 400,000
Justin Berk, capital975,000
Total liabilities and owner’s equity$1,375,000
b. Owner’s equity, March 31............................................................... $975,000
Owner’s equity, February 29.......................................................... 840,000
Net income.............................................................................. $135,000
c. Owner’s equity, March 31............................................................... $975,000
Owner’s equity, February 29.......................................................... 840,000
Increase in owner’s equity......................................................... $135,000
Add withdrawal.............................................................................. 50,000
Net income.............................................................................. $185,000