Assessing Financial Statement Effects of Transactions (LOI) Services, a firm pro

Question

Assessing Financial Statement Effects of Transactions (LOI) Services, a firm providing art services for advertisers, began business on June 1. The following accounts are needed to record the transactions for June: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Service Fees Earned; Rent Expense; Utilities Expense; and Wages Expense. Record the following transactions for June using the financial statement effects template. June I M. DeFond invested $12.000 cash to begin the business in exchange for common stock. Paid $950 cash for June rent. Purchased $6,400 of office equipment on credit. Purchased $3,800 of art materials and other supplies; the company paid $1,800 cash with the remainder due within 30 days. Billed clients $4,700 for services rendered. Collected $3,250 cash from clients on their accounts billed on June Paid $5,000 cash toward the account for office equipment (sec June Paid $900 cash for dividends. Paid $350 cash for June utilities. Paid $2,500 cash for June wages.

Explanation / Answer

Solution:

Statement showing the transactions for June using the financial statement effects template:

Balance Sheet

Income Statement

Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital June 1          12,000 + 0 = 0 +                            12,000 + 0 June 2             (950) + 0 = 0 + 0 +                     (950) June 3 0 +                      6,400 =          6,400 + 0 + 0 June 6          (1,800) +                      3,800 =          2,000 + 0 + 0 June 11 0 +                      4,700 = 0 + 0 +                    4,700 June 17            3,250 +                    (3,250) = 0 + 0 + 0 June 19          (5,000) + 0 =       (5,000) + 0 + 0 June 25             (900) + 0 = 0 + 0 +                     (900) June 30             (350) + 0 = 0 + 0 +                     (350) June 30          (2,500) + 0 = 0 + 0 +                 (2,500) Total            3,750                    11,650          3,400                            12,000 0

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