Assets = Liabilities + Owner's Equity Salaries Supplies Drawing + Earned - Expense - Expense - Expense - Expense - Expense Accounts Accounts Chad Wilson, Chad Wilson, Fees Rent Auto Misc. Cash + Receivable + Supplies= Payable + Capital
Transactions
On June 1 of the current year, Chad Wilson established a business to
manage rental property. He completed the following transactions during
June:
a. Opened a business bank account with a de posit of $30,000 from
personal funds.
b. Purchased office supplies on account, $1,800.
c. Received cash from fees earned for managing rental property,
$10,000.
d. Paid rent on office and equipment for the month, $4,500.
e. Paid creditors on account, $1,250.
f. Billed customers for fees earned for managing rental property,
$16,800.
g. Paid automobile expenses (including rental charges) for the
month, $750, and miscellaneous expenses, $980.
h. Paid office salaries, $4,000.
i. Determined that the cost of supplies on hand was $680; therefore,
the cost of supplies used was $1, 120.
j. Withdrew cash for personal use, $7,500.
Instructions
1. Indicate the effect of each transaction and the balances after each
transaction, using the following tabular headings: (attached)
2. Briefly explain why the owner's investment and revenues increased
owner's equity, while withdrawals and expenses decreased owner's
equity.
3. Determine the net income for June.
4. How much did June's transactions increase or decrease Chad
Wilson's capital?
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