Assets - Liabilities + Stockholders' Equity Salaries Supplies Dividends + Earned - Expense - Expense Expense - Expense - Expense Accounts Accounts Common Fees Rent Auto Misc. Cash + Receivable + Supplies- Payable + Stock
Transactions
On September 1 of the current year, Joy Tucker established a business to
manage rental property. She completed the following transactions
during September:
. A. Opened a business bank account with a deposit of $36,000 in
exchange for common stock.
. B. Purchased office supplies on account, $1,800.
. C. Received cash from fees earned for managing rental property,
$6,750.
. D. Paid rent on office and equipment for the month, $5,000.
E. Paid creditors on account, $1,375.
. F. Billed customers for fees earned for managing rental property,
$9,500.
. G. Paid automobile expenses for month, $840, and miscellaneous expenses, $960.
. H. Paid office salaries, $3,600.
. I. Determined that the cost of supplies on hand was $350;
therefore, the cost of supplies used was $1, 450.
J. Paid dividends, $3,000.
Instructions
1. Indicate the effect of each transaction and the balances after each
transaction, using the following tabular headings: (attached)
2. Briefly explain why issuing common stock and revenues increased
stockholders' equity.
3. Determine the net income for September.
4. How much did September's transactions increase or decrease
earnings
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
