Transactions; financial statements On April 1, 2016, Maria Adams established Custom Realty. Maria completed the following transactions during the month of April a. Opened a business bank account with a deposit of $24,000 in exchange for common stock. b. Paid rent on office and equipment for the month, $3,600. c. Paid automobile expenses (including rental charge) for month, $1,350, and miscel­laneous expenses, $600. d. Purchased office supplies on account, $1,200. e. Earned sales commissions, receiving cash, $19,800. f. Paid creditor on account, $750. g. Paid office salaries. $2,500. h. Paid dividends, $3,500. i. Determined that the cast of supplies on hand was $300; therefore, the cost of supplies used was $900. Instructions 1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings: 2. Prepare an income statement for April, a retained earnings statement for April, and balance sheet as of April 30.

BuyFind

Financial & Managerial Accounting

13th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285866307
BuyFind

Financial & Managerial Accounting

13th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285866307

Solutions

Chapter
Section
Chapter 1, Problem 1.4BPR
Textbook Problem

Transactions; financial statements

On April 1, 2016, Maria Adams established Custom Realty. Maria completed the following transactions during the month of April

  • a. Opened a business bank account with a deposit of $24,000 in exchange for common stock.
  • b. Paid rent on office and equipment for the month, $3,600.
  • c. Paid automobile expenses (including rental charge) for month, $1,350, and miscel­laneous expenses, $600.
  • d. Purchased office supplies on account, $1,200.
  • e. Earned sales commissions, receiving cash, $19,800.
  • f. Paid creditor on account, $750.
  • g. Paid office salaries. $2,500.
  • h. Paid dividends, $3,500.
  • i. Determined that the cast of supplies on hand was $300; therefore, the cost of supplies used was $900.

Instructions

1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:

Chapter 1, Problem 1.4BPR, Transactions; financial statements On April 1, 2016, Maria Adams established Custom Realty. Maria

2. Prepare an income statement for April, a retained earnings statement for April, and balance sheet as of April 30.

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Chapter 1 Solutions

Financial & Managerial Accounting
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