McGuire Company Is a Sole Proprietorship

question 133

Essay

McGuire Company is a sole proprietorship.The financial transactions of McGuire Company for the month of May,their first month of operations,are as follows:
• On May 1,2019,Deborah McGuire,the owner,contributed $20,000 cash in exchange for capital.
• On May 3,the company borrowed $5,000 from a creditor and executed a note payable with the principal and interest to be due in one year.
• On May 7,the company purchased $15,000 of equipment for cash.
• On May 8,McGuire Company rendered service to a client and received $3,000 in cash.
• On May 12,the company incurred a repair expense of $1,800 and promised to pay the repair contractor the following month.
• On May 18,the company rendered service to a new client in the amount of $8,000 on account,as the client promised to pay the following month.
• At the end of May,Deborah McGuire withdrew $1,500 cash for personal use.
Required:
1.Prepare a transaction analysis of the transactions.Determine the effects of the transactions on the accounting equation.
2.Prepare an income statement and a statement of owner's equity for the month ending May 31,2019 for
McGuire Company.
3.Prepare a balance sheet at May 31,2019.

---

Definitions:

Rule-based Theories

Philosophical theories that emphasize the importance of following structured, predefined rules or guidelines to determine moral conduct or decision-making processes.

Character Theories

Theories that attempt to explain aspects of a person's character, often focusing on traits, motivations, and behaviors that define their personality.

Moral Rights

Rights concerning the recognition of personal autonomy and the protection of individuals from harm, aligning with ethical standards and moral principles.

Consequential Theories

Ethical theories that judge actions based solely on their outcomes or consequences, focusing on the greater good or harm resulting from them.