Fredonia Repair Inc. was started on May 1. A summary of May transactions is pres

Question

Fredonia Repair Inc. was started on May 1. A summary of May transactions is presented below.

11. Collected cash of $140 for services billed in transaction (10).

Prepare a tabular analysis of the transactions. Revenue is called Service Revenue.

From an analysis of the Retained Earnings columns, compute the net income or net loss for May.

1. Stockholders invested $15,500 cash in the business in exchange for common stock. 2. Purchased equipment for $5,500 cash. 3. Paid $200 cash for May office rent. 4. Paid $600 cash for supplies. 5. Incurred $300 of advertising costs in the Beacon News on account. 6. Received $5,000 in cash from customers for repair service. 7. Declared and paid a $1,000 cash dividend. 8. Paid part-time employee salaries $1,000. 9. Paid utility bills $140. 10. Performed repair services worth $990 on account.

11. Collected cash of $140 for services billed in transaction (10).

Prepare a tabular analysis of the transactions. Revenue is called Service Revenue.

From an analysis of the Retained Earnings columns, compute the net income or net loss for May.

Explanation / Answer

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Trasaction Cash Accounts
Receivable Supplies Office Equipment Notes Payable Accounts Payable Common Stock Retained Earnings 1 15500 15500 2 -5500 5500 3 -200 -200 4 -600 600 5 300 -300 6 5000 5000 7 -1000 -1000 8 -1000 -1000 9 -140 -140 10 990 990 11 140 -140 12200 850 600 5500 0 300 15500 3350

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