Transactions On April 1 of the current year, Morgan Jones established a business to manage rental property. She completed the following transactions du a. Opened a business bank account with a deposit of $31,000 in exchange for common stock. b. Purchased office supplies on account, $2,320. c. Received cash from fees earned for managing rental property, $6,580. d. Paid rent on office and equipment for the month, $2,840. e. Paid creditors on account, $1,050. f. Billed customers for fees earned for managing rental property, $5,260. g. Paid automobile expenses for month, $630, and miscellaneous expenses, $320. n. Paid office salaries, $2,000. i. Determined that the cost of supplies on hand was $1,370; therefore, the cost of supplies used was $950. j. Paid dividends, $1,890. Required: 1. Indicate the effect of each transaction and the balances after each transaction: for those boxes in which no entry is required, leave the box blank. for those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)

Transactions On April 1 of the current year, Morgan Jones established a business to manage rental property. She completed the following transactions du a. Opened a business bank account with a deposit of $31,000 in exchange for common stock. b. Purchased office supplies on account, $2,320. c. Received cash from fees earned for managing rental property, $6,580. d. Paid rent on office and equipment for the month, $2,840. e. Paid creditors on account, $1,050. f. Billed customers for fees earned for managing rental property, $5,260. g. Paid automobile expenses for month, $630, and miscellaneous expenses, $320. n. Paid office salaries, $2,000. i. Determined that the cost of supplies on hand was $1,370; therefore, the cost of supplies used was $950. j. Paid dividends, $1,890. Required: 1. Indicate the effect of each transaction and the balances after each transaction: for those boxes in which no entry is required, leave the box blank. for those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)

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Description: TransactionsOn April 1 of the current year, Morgan Jones established a business to manage rental property. She completed the following transactions during April:a. Opened a business bank account with a deposit of $31,000 in exchange for common stock

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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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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Question

Transactions
On April 1 of the current year, Morgan Jones established a business to manage rental property. She completed the following transactions during April:
a. Opened a business bank account with a deposit of $31,000 in exchange for common stock.
b. Purchased office supplies on account, $2,320.
c. Received cash from fees earned for managing rental property, $6,580.
d. Paid rent on office and equipment for the month, $2,840.
e. Paid creditors on account, $1,050.
f. Billed customers for fees earned for managing rental property, $5,260.
g. Paid automobile expenses for month, $630, and miscellaneous expenses, $320.
h. Paid office salaries, $2,000.
i. Determined that the cost of supplies on hand was $1,370; therefore, the cost of supplies used was $950.
j. Paid dividends, $1,890.
Required:
1. Indicate the effect of each transaction and the balances after each transaction:
For those boxes in which no entry is required, leave the box blank.
For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)
Assets
Accounts
Receivable
Item
a.
b.
Bal.
C.
Bal.
d.
Bal.
e.
Bal.
f.
Bal.
9.
Bal.
h.
Bal.
i.
Bal.
j.
Bal.
Cash
+
+ Supplies =
Liabilities
Accounts
Payable
+
Common
Stock
Dividends +
2. Stockholders' equity is the right of stockholders (owners) to the assets of the business. These rights are
3. Determine the net income for April.
4. How much did April's transactions increase or decrease stockholders' equity?
by $
Fees
Earned
Stockholders' Equity
Sal.
Expense
Rent
Expense
Supp.
Expense
by issuing common stock and revenues and
Auto
Expense
Misc.
Expense
Item
a.
b.
Bal.
C.
Bal.
d.
Bal.
e.
Bal.
f.
Bal.
9.
Bal.
h.
Bal.
i.
Bal.
j.
Bal.
by dividends and expenses.

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