Nancy O'Rode,doing Business as O'Rode Consulting,performs Consulting Services for Companies

question 2

Essay

Nancy O'Rode,doing business as O'Rode Consulting,performs consulting services for companies that create online learning games for children.On January 1,2015,she started a sole proprietorship by placing $15,000 cash in a bank account opened for the business.Each month during the year,O'Rode withdrew $500 cash from the business for personal use.At December 31,2015,after the last withdrawal,the Drawings account reflected a debit balance of $6,000.During the year,the usual journal entries for the year,including adjusting and closing entries for the revenue and expense accounts,resulted in total revenue of $60,000,total expenses of $12,000,and net income of $48,000.(For purposes of the related journal entry,use the accounts "Consulting Revenue" and "Operating Expenses.")
Part a.Prepare the journal entry to record the initial capital contribution.
Part b.Prepare the journal entry to record one of the monthly withdrawals.
Part c.Prepare the journal entry to close the net income to the N.O'Rode,Capital account.
Part d.Prepare the journal entry to close the N.O'Rode,Drawings accounts at the end of the year.
Part e.Prepare a Statement of Owner's Equity for the year ending December 31,2015.

Understand the components and preparation of a multiple-step income statement.

Analyze the effects of sales, expenses, and transactions on net income, gross profit, and stockholders' equity.

Understand cash flow statement components and what constitutes an operating activity.

Calculate and understand stockholders' equity and how transactions affect its components.

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Definitions:

Randomization

Randomization involves assigning individuals to groups by chance processes.

Research Groups

Teams or collections of individuals conducting studies focused on specific academic or scientific inquiries.

Statistical Analysis

The process of collecting, exploring, and presenting large amounts of data to discover underlying patterns and trends.

Field Experiment

An experimental research study conducted in a natural setting outside the laboratory to understand the impact of independent variables on a particular outcome.