INSURANCE AGENCY TRANSACTIONS: A. OPEN ACCOUNT WITH DEPOSIT OF $75,000 FROM PERS

Question

INSURANCE AGENCY TRANSACTIONS:

A. OPEN ACCOUNT WITH DEPOSIT OF $75,000 FROM PERSONAL FUNDS
B. SUPPLIES PURCHASED $3,000
C. PAID CREDITORS ACCOUNT $1,000
D. RECEIVED CASH FROM FEES EARNED IN INSURANCE COMMISSIONS $11,800
E. PAID RENT AND OFFICE EQUIPMENT FOR THE MONTH $4,000
F. PAID AUTOMOBILE EXPENSES FOR THE MONTH $600 AND MISCELLANEOUS EXPENSES $200
G. PAID OFFICE SALARIES $2,500
H. DETERMINED THAT THE COST OF SUPPLIES ON HAND WAS $1,900; THEREFORE COST OF SUPPLIES USED WAS $1,100
I. BILLED INSURANCE COMPANIES FOR SALES COMMISSIONS EARNED $12,500
J. WITHDREW CASH FOR PERSONAL USE $5,000


1. INDICATE THE EFFECT OF EACH TRANSACTION AND THE BALANCES AFTER EACH TRANSACTION.
2. EXPLAIN WHY THE OWNER'S INVESTMENT AND REVENUES INCREASED OWNER'S EQUITY, WHILE WITHDRAWALS AND EXPENSES DECREASED OWNER'S EQUITY.
3. DETERMINE THE HET INCOME FOR JANUARY.
4. HOW MUCH DID JANUARY'S TRANSACTIONS INCREASE OR DECREASE CODY MACEDO'S CAPITAL?

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