(a) Journalizing the transactions:
1. The owner invested $650,000 cash in the business:
Debit: Cash ($650,000)
Credit: Owner's Equity ($650,000)
2. The company purchased $170,000 of furniture on credit:
Debit: Furniture ($170,000)
Credit: Accounts Payable ($170,000)
3. The company received $280,000 cash in exchange for selling goods:
Debit: Cash ($280,000)
Credit: Sales Revenue ($280,000)
4. The company paid $12,500 for this month's rent:
Debit: Rent Expense ($12,500)
Credit: Cash ($12,500)
5. The owner withdrew $30,000 cash for personal use:
Debit: Owner's Equity ($30,000)
Credit: Cash ($30,000)
6. The owner invested again $325,000 cash in the business:
Debit: Cash ($325,000)
Credit: Owner's Equity ($325,000)
7. The company purchased goods on credit $220,000:
Debit: Inventory ($220,000)
Credit: Accounts Payable ($220,000)
8. The company received $70,000 cash for buying furniture in transaction no. -02:
Debit: Cash ($70,000)
Credit: Furniture ($70,000)
9. The company purchased $55,000 of office computer:
Debit: Office Computer ($55,000)
Credit: Cash ($55,000)
10. The company paid $20,500 for advertisement, $15,600 for salary, and $10,000 for utility bills:
Debit: Advertisement Expense ($20,500), Salary Expense ($15,600), Utility Expense ($10,000)
Credit: Cash ($46,100)
(b) Tabular sheet for the transactions:
| Transaction | Debit | Credit |
|-------------|----------------------|----------------------|
| 1 | Cash ($650,000) | Owner's Equity ($650,000) |
| 2 | Furniture ($170,000) | Accounts Payable ($170,000) |
| 3 | Cash ($280,000) | Sales Revenue ($280,000) |
| 4 | Rent Expense ($12,500) | Cash ($12,500) |
| 5 | Owner's Equity ($30,000) | Cash ($30,000) |
| 6 | Cash ($325,000) | Owner's Equity ($325,000) |
| 7 | Inventory ($220,000) | Accounts Payable ($220,000) |
| 8 | Cash ($70,000) | Furniture ($70,000) |
| 9 | Office Computer ($55,000) | Cash ($55,000) |
| 10 | Advertisement Expense ($20,500), Salary Expense ($15,600), Utility Expense ($10,000) | Cash ($46,100) |
(c) Preparing financial statements:
Income Statement:
- Sales Revenue: $280,000
- Advertisement Expense: $20,500
- Salary Expense: $15,600
- Utility Expense: $10,000
= Net Income: $234,900
Owner's Equity Statement:
- Owner's Capital: $650,000 + $325,000 = $975,000
- Owner's Withdrawals: $30,000
= Ending Owner's Equity: $945,000
Balance Sheet:
- Assets:
- Cash: $650,000 + $280,000 - $12,500 - $30,000 + $325,000 + $70,000 + $55,000 - $46,100 = $1,291,400
- Furniture: $170,000 - $70,000 = $100,000
- Inventory: $220,000
- Office Computer: $55,000
- Liabilities:
- Accounts Payable: $170,000 + $220,000 = $390,000
- Owner's Equity: $945,000
This tabular analysis and financial statements demonstrate the effects of each transaction on the business's accounts and overall financial position.