Assessing Financial Statement Effects of Transactions DeFond Services, a firm providing art services for advertisers, began business on June 1. The following accounts are needed to record the transactions for June: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Service Fees Earned; Rent Expense; Utilities Expense; and Wages Fxnense Record the follo transactions for Juneusing the financial
Assessing Financial Statement Effects of Transactions DeFond Services, a firm providing art services for advertisers, began business on June 1. The following accounts are needed to record the transactions for June: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Service Fees Earned; Rent Expense; Utilities Expense; and Wages Fxnense Record the follo transactions for Juneusing the financial
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:### Assessing Financial Statement Effects of Transactions
**DeFond Services**, a firm providing art services for advertisers, began business on June 1. The following accounts are needed to record the transactions for June:
- **Cash**
- **Accounts Receivable**
- **Supplies**
- **Office Equipment**
- **Accounts Payable**
- **Common Stock**
- **Dividends**
- **Service Fees Earned**
- **Rent Expense**
- **Utilities Expense**
- **Wages Expense**
Record the following transactions for June using the financial statement effects template. (Record each transaction in the order it appears.)
#### Transactions for June:
1. **June 1:** M. DeFond invested $12,000 cash to begin the business in exchange for common stock.
2. **June 2:** Paid $950 cash for June rent.
3. **June 5:** Purchased $6,400 of office equipment on credit.
4. **June 6:** Purchased $3,800 of art materials and other supplies; the company paid $1,800 cash with the remainder due within 30 days.
5. **June 11:** Billed clients $4,700 for services rendered.
6. **June 17:** Collected $3,250 cash from clients on their accounts billed on June 11.
7. **June 20:** Paid $5,000 cash toward the account for office equipment (see June 3).
8. **June 25:** Paid $900 cash for dividends.
9. **June 26:** Paid $350 cash for June utilities.
10. **June 30:** Paid $2,500 cash for June wages.
### Graph Explanation
The **Balance Sheet** and **Income Statement** diagram shown below the transactions is used to illustrate how each transaction impacts various financial statement elements. The template includes columns for:
- **Transaction**: Chronological listing of transactions.
- **Balance Sheet**:
- **Cash**
- **Noncash Assets**
- **Liabilities**
- **Contributed Capital**
- **Earned Capital**
- **Income Statement**:
- **Revenue**
- **Expenses**
- **Net Income**
Each transaction is categorized into one or more components of the financial statements, demonstrating the effect on both the balance sheet and the income statement. For example:
- When M. DeFond invests $12,000 cash, it increases **Cash (Asset)** and **
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