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Transactions; financial statements 2. Net income: $10,850 On April 1, 20Y8, 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 for month, $1,350, and miscellaneous expenses, $600. d. Purchased 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 cost 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 statement of stockholders’ equity for April, and a balance sheet as of April 30.

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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 1, Problem 4PB
Textbook Problem
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Transactions; financial statements

2. Net income: $10,850

On April 1, 20Y8, 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 for month, $1,350, and miscellaneous expenses, $600.

d. Purchased 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 cost 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 4PB, Transactions; financial statements 2. Net income: 10,850 On April 1, 20Y8, Maria Adams established

2. Prepare an income statement for April, a statement of stockholders’ equity for April, and a balance sheet as of April 30.

1.

To determine

Indicate the effect of the given transactions using the accounting equation.

Explanation of Solution

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relation between resources or assets of a business and claims on the resources by the creditors, and the owners...

2.

To determine

Prepare the income statement, statement of stockholder's equity and balance sheet for Company CR.

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Financial And Managerial Accounting
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