An analysis of the transactions made by S. Moses & Co., a certified public accou

Question

An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below. Each increase and decrease in stockholder's equity is explained.

Instructions

(a) How much did stockholder's equity increase for the month?

$

(b) Compute the amount of net income for the month. (If a net loss, record amount using either a negative sign preceding the number eg -45 or parentheses eg (45).)

$

Cash + Accounts
Receivable + Supplies + Office
Equipment = Accounts
Payable + Stockholder's Equity 1. +$15,000 +$15,000 Investment 2. -2,000 +$5,000 +$3,000 3. -750 +$750 4. +4,600 +$3,700 +8,300 Service Revenue 5. -1,500 -1,500 6. -2,000 -2,000 Dividends 7. -650 -650 Rent Expense 8. +450 -450 9. -4,900 -4,900 Salaries Expense 10. +500 -500 Utilities Expense

Explanation / Answer

a) Stockholder's Equity increase = 15,000 + 8,300 - 2,000 - 650 - 4,900 - 500
Stockholder's Equity increase = 15,250

b) Net income = (3,000 - 1,500 + 500) + (8,300 - 2,000 - 650 - 4,900 - 500)
Net income = 2,250

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