Transactions On September 1 of the current year, Joy Tucker established a busine

Question

Transactions

On September 1 of the current year, Joy Tucker established a business to manage rental property. She completed the following transactions during September:

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)

2. Stockholders' equity is the right of stockholders' to the assets of the business. These rights are increased by issuing common stock and revenues and decreased by dividends and expenses.

3. Determine the net income for September.
$

4. How much did September's transactions (a-j) increase or decrease retained earnings?
Increased by $

Assets = Liabilities + Stockholders' Equity Item Cash + Accounts Receivable + Supplies = Accounts Payable + Common Stock - Dividends + Fees Earned - Rent Expense - Sal. Expense - Supp. Expense - Auto Expense - Misc. Expense Item a. a. b. b. Bal. Bal. c. c. Bal. Bal. d. d. Bal. Bal. e. e. Bal. Bal. f. f. Bal. Bal. g. g. Bal. Bal. h. h. Bal. Bal. i. i. Bal. Bal. j. j. Bal. Bal.

Explanation / Answer

Solution 1:

Solution 2:

Stockholders' rights are incresed by issuing common stock and revenue and decreased by dividends and expenses.

Solution 3:

Net Income = Fees earned - Rent expense - sal. expense - supp. expense - Auto expense- Misc. expense

= $16250 - $5000 - $3600 - $1450 - $840 - $960 = $4,400

Solution 4:

Increase in retained earnings = Net income - Dividends paid = $4400 - $3000 = $1,400

Assets = Liabilities + Stockholders' Equity Item Cash + Accounts Receivable + Supplies Accounts Payable + Common stock - Dividends + Fees Earned - Rent Expense - Sal. Expense - Supp. Expense - Auto Expenses - Misc. Expense Item a. $36,000.00 $36,000.00 a. b. $1,800.00 $1,800.00 b. Bal. $36,000.00 $1,800.00 $1,800.00 $36,000.00 Bal. c. $6,750.00 $6,750.00 c. Bal. $42,750.00 $1,800.00 $1,800.00 $36,000.00 $6,750.00 Bal. d. -$5,000.00 $5,000.00 d. Bal. $37,750.00 $1,800.00 $1,800.00 $36,000.00 $6,750.00 $5,000.00 Bal. e. -$1,375.00 -$1,375.00 e. Bal. $36,375.00 $1,800.00 $425.00 $36,000.00 $6,750.00 $5,000.00 Bal. f. $9,500.00 $9,500.00 f. Bal. $36,375.00 $9,500.00 $1,800.00 $425.00 $36,000.00 $16,250.00 $5,000.00 Bal. g. -$1,800.00 $840.00 $960.00 g. Bal. $34,575.00 $9,500.00 $1,800.00 $425.00 $36,000.00 $16,250.00 $5,000.00 $840.00 $960.00 Bal. h. -$3,600.00 $3,600.00 h. Bal. $30,975.00 $9,500.00 $1,800.00 $425.00 $36,000.00 $16,250.00 $5,000.00 $3,600.00 $840.00 $960.00 Bal. i. -$1,450.00 $1,450.00 i. Bal. $30,975.00 $9,500.00 $350.00 $425.00 $36,000.00 $16,250.00 $5,000.00 $3,600.00 $1,450.00 $840.00 $960.00 Bal. j. -$3,000.00 $3,000.00 j. Bal. $27,975.00 $9,500.00 $350.00 $425.00 $36,000.00 $3,000.00 $16,250.00 $5,000.00 $3,600.00 $1,450.00 $840.00 $960.00 Bal.

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