Transactions On September 1 of the current year, Joy Tucker established a busine
ID: 2519390 • Letter: T
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:
Opened a business bank account with a deposit of $44,000 in exchange for common stock.
Purchased office supplies on account, $2,990.
Received cash from fees earned for managing rental property, $8,080.
Paid rent on office and equipment for the month, $3,670.
Paid creditors on account, $1,360.
Billed customers for fees earned for managing rental property, $6,790.
Paid automobile expenses for month, $810, and miscellaneous expenses, $410.
Paid office salaries, $2,580.
Determined that the cost of supplies on hand was $1,770; therefore, the cost of supplies used was $1,220.
Paid dividends $2,440.
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 by issuances of capital stock and revenues and 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?
by $
Explanation / Answer
Answer 1. S.no. Assets = Liabilities + Stockholders' Equity Cash + Accounts Receivable + Supplies Accounts Payable Common Stock - Dividends + Fees earned - Rent Expense - Salary Expense - Supplies Expense - Auto Expense - Misc. Expense a. 44,000.00 + + = + 44,000.00 - + - - - - - b. + + 2,990.00 = 2,990.00 + - + - - - - - Bal. 44,000.00 + - + 2,990.00 = 2,990.00 + 44,000.00 - - + - - - - - - - - - - - c. 8,080.00 + + = + - + 8,080.00 - - - - - Bal. 52,080.00 + - + 2,990.00 = 2,990.00 + 44,000.00 - - + 8,080.00 - - - - - - - - - - d. (3,670.00) + + = + - + - 3,670.00 - - - - Bal. 48,410.00 + - + 2,990.00 = 2,990.00 + 44,000.00 - - + 8,080.00 - 3,670.00 - - - - - - - - e. (1,360.00) + + = (1,360.00) + - + - - - - - Bal. 47,050.00 + - + 2,990.00 = 1,630.00 + 44,000.00 - - + 8,080.00 - 3,670.00 - - - - - - - - f. + 6,790.00 + = + - + 6,790.00 - - - - - Bal. 47,050.00 + 6,790.00 + 2,990.00 = 1,630.00 + 44,000.00 - - + 14,870.00 - 3,670.00 - - - - - - - - g. (1,220.00) + + = + - + - - - - 810.00 - 410.00 Bal. 45,830.00 + 6,790.00 + 2,990.00 = 1,630.00 + 44,000.00 - - + 14,870.00 - 3,670.00 - - - - - 810.00 - 410.00 h. (2,580.00) + + = + - + - - 2,580.00 - - - Bal. 43,250.00 + 6,790.00 + 2,990.00 = 1,630.00 + 44,000.00 - - + 14,870.00 - 3,670.00 - 2,580.00 - - - 810.00 - 410.00 i. + + (1,220.00) = + - + - - - 1,220.00 - - Bal. 43,250.00 + 6,790.00 + 1,770.00 = 1,630.00 + 44,000.00 - - + 14,870.00 - 3,670.00 - 2,580.00 - 1,220.00 - 810.00 - 410.00 j. (2,440.00) + + = + - 2,440.00 + - - - - - Bal. 40,810.00 + 6,790.00 + 1,770.00 = 1,630.00 + 44,000.00 - 2,440.00 + 14,870.00 - 3,670.00 - 2,580.00 - 1,220.00 - 810.00 - 410.00 Total Assets = $49,370 = Total Liabilities = $1,630 + Total Owners' Equity = $47,740 = Total Liabilities & Owners' Equity = $49,370 Answer 2. Total Stockholders' Equity = $47,740 Answer 3. Income Statement Fees Earned 14,870.00 Expenses Rent Expense 3,670.00 Salary Expense 2,580.00 Supplies Expense 1,220.00 Auto Expense 810.00 Misc. Expense 410.00 8,690.00 Net Income 6,180.00 Answer 4. Net Income 6,180.00 Dividend Paid (2,440.00) Net Increase (Decrease) in Retained Earnings 3,740.00
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