Analyze transactions and compute net income. Excel Check figures provide a key number to let you know you are on the right track. a. Total assets $13,560 P1.1A (LO 4), AP Fredonia Repair Inc. was started on May 1. A summary of May transactions is pre- sented as follows. 1. Stockholders invested $10,000 cash in the business in exchange for common stock. 2. Purchased equipment for $5,000 cash. 3. Paid $400 cash for May office rent. 4. Paid $300 cash for supplies. 5. Incurred $250 of advertising costs in the Beacon News on account. 6. Received $4,700 in cash from customers for repair service. 7. Declared and paid a $700 cash dividend. 8. Paid part-time employee salaries $1,000. 9. Paid utility bills $140. 10. Performed repair services worth $1,100 on account. 11. Collected cash of $120 for services billed in transaction (10). Instructions a. Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Common Stock, and Retained Earnings (with separate columns for Revenues, Expenses, and Dividends). Include margin explanations for any changes in stockholders' equity. Revenue is called Service Revenue. nobris of the Retained Earnings columns, compute the net income or net loss for May.
Analyze transactions and compute net income. Excel Check figures provide a key number to let you know you are on the right track. a. Total assets $13,560 P1.1A (LO 4), AP Fredonia Repair Inc. was started on May 1. A summary of May transactions is pre- sented as follows. 1. Stockholders invested $10,000 cash in the business in exchange for common stock. 2. Purchased equipment for $5,000 cash. 3. Paid $400 cash for May office rent. 4. Paid $300 cash for supplies. 5. Incurred $250 of advertising costs in the Beacon News on account. 6. Received $4,700 in cash from customers for repair service. 7. Declared and paid a $700 cash dividend. 8. Paid part-time employee salaries $1,000. 9. Paid utility bills $140. 10. Performed repair services worth $1,100 on account. 11. Collected cash of $120 for services billed in transaction (10). Instructions a. Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Common Stock, and Retained Earnings (with separate columns for Revenues, Expenses, and Dividends). Include margin explanations for any changes in stockholders' equity. Revenue is called Service Revenue. nobris of the Retained Earnings columns, compute the net income or net loss for May.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problems
Analyze transactions and compute net
income.
Excel
Check figures provide a key
number to let you know you are
on the right track.
a. Total assets $13,560
b. Net income $4,010
Analyze transactions and prepare
income statement, retained earnings
statement, and balance sheet.
P1.1A (LO 4), AP Fredonia Repair Inc. was started on May 1. A summary of May transactions is pre-
sented as follows.
1. Stockholders invested $10,000 cash in the business in exchange for common stock.
2. Purchased equipment for $5,000 cash.
3. Paid $400 cash for May office rent.
4. Paid $300 cash for supplies.
5. Incurred $250 of advertising costs in the Beacon News on account.
6. Received $4,700 in cash from customers for repair service.
7. Declared and paid a $700 cash dividend.
8. Paid part-time employee salaries $1,000.
9. Paid utility bills $140.
10. Performed repair services worth $1,100 on account.
11. Collected cash of $120 for services billed in transaction (10).
Instructions
a. Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts
Receivable, Supplies, Equipment, Accounts Payable, Common Stock, and Retained Earnings (with
separate columns for Revenues, Expenses, and Dividends). Include margin explanations for any
changes in stockholders' equity. Revenue is called Service Revenue.
b. From an analysis of the Retained Earnings columns, compute the net income or net loss for May.
P1.2A (LO 4, 5), AP On August 31, the balance sheet of La Brava Veterinary Clinic showed Cash $9,000,
Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable $3,600, Common Stock
$13,000, and Retained Earnings $700. During September, the following transactions occurred.
1. Paid $2,900 cash for accounts payable due.
2. Collected $1,300 of accounts receivable.
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