Capstone in Accounting Shaw Project

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SHEILA SHAW CONSULTING
Balance Sheet
August 31, 2007

AssetsLiabilities
Current assets:Current liabilities:
Cash$21,300Accounts payable$1,250
Accounts receivable3,800Prepaid rent2,050
Supplies875Unearned fees1,150
Salaries payable150Total liabilities$4,450
Prepaid insurance1,670
Total current assets$27,795
Property, plant, and
equipment:Owner’s Equity
Office equipment$21,250Sheila Shaw, capital47,720
Less accum. depr.675
Total Property, plant,
and equipment20,575Total liabilities and
Total assets$48,370owner’s equity$52,170

In the balance sheet errors are:
1. Salaries payable is a current liability
2. Prepaid rent is a current asset and so we need to make these changes

Corrections are as followed
AssetsLiabilities
Current assets:Current liabilities:
Cash$21,300Accounts payable$1,250
Accounts receivable3,800Salaries Payable150
Supplies875Unearned fees1,150
Prepaid Rent2,050Total liabilities$2,550
Prepaid insurance1,670
Total current assets$29,695
Property, plant, and
Equipment:Owner’s Equity
Office equipment$21,250Sheila Shaw, capital47,720
Less accum. depr.675
Total Property, plant,
and equipment20,575Total liabilities and
Total assets$50,270owner’s equity$50,270

SHEILA SHAW CONSULTING
Income Statement
For the Month Ended August 31, 2007

Fees earned$24,325
Expenses:
Salary expense$1,550
Depreciation expense675
Rent expense1,200
Supplies expense1,250
Insurance expense1,000
Miscellaneous expense715
Interest expense65
Bad Debt expense150
Repairs and Maintenance200
Utilities expense150
Payroll Tax expense125
Office expense525

Total expenses7,605
Net income$16,720

In the income statement depreciation expense was not included. The balance sheet showed a...
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