Chapter 2
Linking Personal Accounting to Business Accounting
53
Review Exercise
Miranda Jones owns a salon called Style House. Record the following transactions for Miranda’s
business on the T-account worksheet provided on the opposite page, and then complete the
income statement, the statement of owner’s equity, and balance sheet. Below are the balances of
the accounts on March 1, 2016.
Cash
$3,000
Equipment
12,000
Accounts payable
5,000
Jones, Capital
10,000
Transactions for the month of March
1. Borrowed $12,000 from the bank.
2. Purchased chairs and dryers with $8,000 cash.
3. Paid $333 cash toward the principal of the bank loan.
4. Paid $50 cash for interest on the bank loan.
5. Prepaid $600 cash for a monthly maintenance contract that will last six months.
6. Provided services to customers and received $8,000 cash.
7. Paid $4,000 cash to employees for salaries for the month.
8. Received a telephone bill for $250 which will be paid next month.
9. Received a bill for $300 for advertising and a bill for $500 for travel, both of which will
be paid later.
10. Paid monthly rent with $2,000 cash.
11. Paid $1,000 owing to a supplier.
12. Miranda withdrew $3,000 cash from the business for personal use.
13. Provided $400 worth of services to customers on account.
14. Received $100 cash from a customer for services to be provided next month.
