Answered: th, $1,300, and miscellaneous expenses,…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter1: Asset, Liability, Owner’s Equity, Revenue, And Expense Accounts

Section: Chapter Questions

Problem 1PB: In July of this year, M. Wallace established a business called Wallace Realty. The account headings...

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

100%

On August 1, 20Y9, Brooke Kline established Western Realty. Brooke completed the following transactions during the month of August:

a.	Opened a business bank account with a deposit of $28,000 in exchange for common stock.
b.	Paid rent on office and equipment for the month, $3,600.
c.	Paid automobile expenses for month, $1,300, and miscellaneous expenses, $700.
d.	Purchased office supplies on account, $1,250.
e.	Earned sales commissions, receiving cash, $18,400.
f.	Paid creditor on account, $750.
g.	Paid office salaries, $3,000.
h.	Paid dividends, $3,300.
i.	Determined that the cost of supplies on hand was $500; therefore, the cost of supplies used was $750.

	Required:
1.	Indicate the effect of each transaction and the balances after each transaction, using the tabular headings in the exhibit below. In each transaction row (rows indicated by a letter), you must indicate the math sign (+ or -) in columns affected by the transaction. You will not need to enter math signs in the balance rows (rows indicated by Bal.). Entries of 0 (zero) are not required and will be cleared if entered.

Required:

Indicate the effect of each transaction and the balances after each transaction, using the tabular headings in the exhibit below. In each transaction row (rows indicated by a letter), you must indicate the math sign (+ or -) in columns affected by the transaction. You will not need to enter math signs in the balance rows (rows indicated by Bal.). Entries of 0 (zero) are not required and will be cleared if entered.

Assets

Liabilities

Stockholders’ Equity

Accounts

Common

Sales

Salaries

Rent

Auto

Supplies

Miscellaneous

Cash

Supplies

Payable

Stock

Dividends

Commissions

Expense

2. a. Prepare an income statement for August. Refer to the list of Accounts, Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. You will not need to enter colons (:) on the income statement. If a net loss has been incurred, enter that amount as a negative number using a minus sign.

2. b. Prepare a statement of stockholders’ equity for August. Refer to the list of Accounts, Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the s

tatement heading. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. If an amount is zero, enter "0".

2. c. Prepare a balance sheet as of August 31. Refer to the list of Accounts, Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions