Question

Sandra Sousa, Registered Dietician Trial Balance July 31, 2018 Balance Account Title Debit Credit Cash 33000 Accounts Receivable 9600 Office Supplies 2200 Prepaid Insurance 2800Equipment 18000Accounts Payable 3100Unearned Revenue 292Notes Payable 34000Sousa, Capital 22000Sousa, Withdrawals 2000 Service Revenue 11258 Salaries Expense 1500Rent Expense 1200 Utilities Expense 350Total $ Net Inoome 70,650 70,650Requirement1. Prepare the income statement for the month ended July 31, 2018,Requirement 2. Prepare the statement of owners equity for the month ended July 31, 2018. Requirement 3. Prepare the balance sheet &s of July 31, 2018. Requirement 4. Calculate the debt ratio as of July 31, 2018 70,650 $ 70,650 Select the debt ratio formula on the first line and then calculate the ratio -Debt ratio

Answer 1

Answer:

Requirement 1. Prepare the income statement for the month ended July 31, 2018.

Sandra Sousa, Registered Dietitian

Income Statement

For the Month Ended July 31, 2018

Service Revenue $11,258

Salaries Expense -$1,500

Rent Expense -$1,200

Utilities Expense -$350

Net income $8,208

Requirement 2. Prepare the statement of owners equity for the month ended July 31, 2018.

Sandra Sousa, Registered Dietitian

Statement of Owner's Equity

For the Month Ended July 31, 2018

Sousa, Capital balance July 1, 2018       $22,000

Investment during month                                  $0

Net income                                                 $8,208

subtotal                                                     $30,208

Withdrawals during the month                -$2,000

Sousa, Capital balance July 31, 2018     $28,208

Requirement 3. Prepare the balance sheet &s of July 31, 2018.

Sandra Sousa, Registered Dietitian

Balance Sheet

For the Month Ended July 31, 2018

Assets:

Cash $33,000

Accounts Receivable $9,600

Office Supplies $2,200

Prepaid Insurance $2,800

Equipment $18,000

Total assets $65,600

Liabilities and equity:

Accounts Payable $3,100

Unearned Revenue $292

Notes Payable $34,000

Sousa, Capital $22,000

Retained earnings $6,208

Total liabilities and equity $65,600

Requirement 4. Calculate the debt ratio as of July 31, 2018.

debt ratio = liabilities / assets = $65,600 / $37,392 = 175.44%

debt to equity ratio = liabilities / equity = $37,392 / $28,208 = 132.56%