ACC 231 CH 2 Case Study CS-1 on workbook pp 100-101 NAME Part a Granyard Clockworks Balance Sheet Granyard Clockworks Income Statement As of May 31, 2018 For the Month Ended May 31, 2018 ASSETS (what you own) INCREASE DECREASE + Cash Opening $40,000 15000 $18,000 $3,500 $2,000 $6,000 $5,000 LIABILITIES (what you owe) DECREASE INCREASE Accounts Payable + Opening REVENUE DECREASE INCREASE Revenue $3,000 Ending Ending Ending LESS EXPENSES INCREASE DECREASE + Accounts Receivable Opening $3,000 DECREASE INCREASE Unearned Revenue + Opening INCREASE DECREASE Maintenance Expense Ending Ending Ending INCREASE DECREASE + Prepaid Insurance Opening 11,000 - DECREASE INCREASE Notes Payable + Opening Ending Ending INCREASE + Opening DECREASE Equipment - INCREASE Ending OWNER'S EQUITY DECREASE INCREASE Granyard, Capital Opening Ending Ending INCREASE DECREASE Salaries Expense Ending INCREASE DECREASE Granyard, Drawing 5,000 Total Assets Total Liabilities Net Worth Part b DECREASE Rent Expense INCREASE DECREASE Telephone Expense 500 Ending Ending Beginning Capital Add: Owner Investment Add: Net Income Less: Owner Withdrawal Ending Capital Total Revenue Less Total Expenses Net Income (Loss) NAME Granyard Clockworks Income Statement For the Month Ended May 31, 2018 REVENUE INCREASE Revenue LESS EXPENSES DECREASE Maintenance Expense DECREASE Rent Expense DECREASE Salaries Expense DECREASE Telephone Expense Chapter 2 a Linking Personal Accounting to Business Accounting Case study Granyard clockworks is a service company that repairs damaged watches and clocks. The company is owned by Maurice Granyard. Maurice is fully liable for all activities of the business. In the most recent month (May 2018), Granyard clockworks had the following transactions. 1. Maurice deposited $40,000 of additional cash into the business 2. Borrowed $15,000 in cash from the bank 3. Paid $3,500 cash for May’s rent 4. Paid $6,000 in salaries for May 5. Performed services and earned $18,000 in cash 6. Incurred telephone expenses of $500 (to be paid next month) 7. Performed services for a client for $3,000 on account 8. Prepaid insurance for one year in the amount of $11,000 9. Incurred maintenance expense of $1,000 (paid on account) 10. Maurice withdrew $5,000 from the business for personal use 11. Received $2,000 cash for repair services to be done in July 12. collected 80% of the $3,000 amount owing from a client for services performed earlier this month As at April 30, 2018, the ending account balances for Granyard clockworks were as follows. cash Accounts Receivable Prepaid Insurance Equipment Accounts Payable $50,000 12,000 800 40,000 2,000 Notes Payable 60,000 Granyard, capital 40,800 required a) complete the T-account worksheets for May 2018. 1 Chapter 2 Linking Personal Accounting to Business Accounting b) If Maurice Granyard sells all of the business’ assets for cash and pays off the company’s debts, what is the remaining amount? What does it represent? 2
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