PR 1-1A Transactions On April 1 of the current y completed the following t: a. Opened a business bank ac b. Purchased office supplies o C. Received cash from fees eam d. Paid rent on office and equi e. Paid creditors on account, S f. Billed customers for fees ea g. Paid automobile expenses h. Paid office salaries, $4,000. i. Determined that the cost ot j. Paid dividends, $5,000.
PR 1-1A Transactions On April 1 of the current y completed the following t: a. Opened a business bank ac b. Purchased office supplies o C. Received cash from fees eam d. Paid rent on office and equi e. Paid creditors on account, S f. Billed customers for fees ea g. Paid automobile expenses h. Paid office salaries, $4,000. i. Determined that the cost ot j. Paid dividends, $5,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:PR 1-1A Transactions
Obj. 4
On April 1 of the current year, Morgan Jones established a business to manage rental property. She
F0. completed the following transactions during April:
of
a. Opened a business bank account with a deposit of $60,000 in exchange for common stock.
b. Purchased office supplies on account, $1,800.
C.
Received cash from fees earned for managing rental property, $22,300.
d. Paid rent on office and equipment for the month, $7,000.
e.
Paid creditors on account, $1,100.
f.
Billed customers for fees earned for managing rental property, $3,600.
g. Paid automobile expenses for month, $750, and miscellaneous expenses, $1,000.
h. Paid office salaries, $4,000.
i.
Determined that the cost of supplies on hand was $250; therefore, the cost of supplies used was $1,550.
j.
Paid dividends, $5,000.
Instructions
1. Indicate the effect of each transaction and the balances after each transaction, using the follow-
ing tabular headings:
= Liabilities+
Stockholders' Equity
Misc.
Supplies
Expense
Accounts
Common
Fees
Rent
Salaries
Auto
e + Supplies = Payable +
Stock
Dividends
+ Earned -
Expense - Expense
Expense
Expense
2.
Briefly explain why issuing common stock and revenues increased stockholders'
equity, while dividends and expenses decreased stockholders' equity.
3. Determine the net income for April.
4. How much did April's transactions increase or decrease stockholders' equity?
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