Question

Problem 1-1A Fredonia Repair Inc. was started on May 1. A summary of May transactions is presented below. 1. Stockholders invested $10,000 cash in the business in exchange for common stock, 2. Purchased equipment for $5,000 cash. 3. Paid $400 cash for May office rent. 4. Paid $300 cash for supplies. 5. Incurred $250 of advertising costs in the Beacon News on account. 6. Received $4,700 in cash from customers for repair service. 7. Declared and paid a $700 cash dividend. 8. Paid part-time employee salaries $1,000. 9. Paid utility bills $140. 10. Performed repair services worth $1,100 on account. 11. Collected cash of $120 for services billed in transaction (10). Prepare a tabular analysis of the transactions. Revenue is called Service Revenue. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 1-8 for example.) Fredonia Repair Inc. Assets Liabilities Accounts Accounts + Receivable + Supplies + Equipment - Payable + Common Stock Cash Stockholders' Equity Retained Earnings Ravenues Expenses Dividends

Answer 1

Table

	Assets							=	liabilities	+	stockholder's equity
													retained earnings
	Cash	+	Account receivable	+	Supplies	+	Equipment	=	Accounts payable	+	Common Stock	+	Revenue	-	Expense	-	dividends
1.	10000										10000
2.	-5000						5000
3	-400														-400
4	-300				300
5									250						-250
6	4700												4700
7	-700																-700
8	-1000														-1000
9	-140														-140
10			1100										1100
11	120		-120