Fredonia Repair Inc. was started on May 1. A summary of May transactions is presented below. 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, and Expenses and Dividends.) Include margin explanations for any changes in Retained Earnings. Revenue is called Service Revenue. (b) From an analysis of the Retained Earnings columns, compute the net income or net loss for May.

Fredonia Repair Inc. was started on May 1. A summary of May transactions is presented below. 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, and Expenses and Dividends.) Include margin explanations for any changes in Retained Earnings. Revenue is called Service Revenue. (b) From an analysis of the Retained Earnings columns, compute the net income or net loss for May.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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