Question

Nona Curry started her own consulting firm, Splish Brothers Inc., on May 1, 2017. The following transactions occurred during the month of May: May 1 Stockholders invested $20,775 cash in the business in exchange for common stock 2 Paid $831 for office rent for the month 3 Purchased $692 of supplies on account. 5 Paid $208 to advertise for the month in the County News. 9 Received $1,939 cash for services performed. 12 Paid $277 cash dividend. 15 Performed $5,817 of services on account. 17 Paid $3,462 for employee salaries. 20 Paid for the supplies purchased on account on May 3. 23 Received a cash payment of $1,662 for services performed on account on May 15. 26 Borrowed $6,925 from the bank on a note payable. 29 Purchased office equipment for $2.770 paying $277 in cash and the balance on account. 30 Paid $249 for utilities. Show the effects of the above transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year. If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity place a negative sign for parentheses) in front of the amount entered for the particular Asset Liability or Equity item that was reduced.) Kof 2011

Answer 1

Balance Sheet Stockholders' Equity Retained Earnings Cash Common Stock $ 20,775.00 Dividends + Revenue - Expenses + - $ 831.00 + + + + + 208.00 Advertising Expense Service Revenue + 1,939.00 + + Assets Liabilities Accounts Office Accounts + Supplies + Receivable + Equipment = Payable + Note Payable = 20,775.00 + (831.00) + + $ 692.00 $ 692.00 (208.00) + 1,939.00 (277.00) + + $ 5,817.00 (3,462.00) + (692.00) + $ (692.00) 1,662.00 + $ (1,662.00) + 6,925.00 + + $ 6,925.00 (277.00) + + $ 2,770.00 = $ 2,493.00 (249.00) + + + + - $ + $ 277.00 + + $ + May.1 May.2 May.3 May.5 May.9 May. 12 May.15 May.17 May.20 May.23 May.26 May.29 May.30 Ending Balance 5,817.00 Service Revenue 3,462.00 Salaries Expense + - $ + 249.00 Utilities Expense $ 25,305.00 + $ 692.00 + $ 4,155.00 + $ 2,770.00 = $ 2,493.00 + $ 6,925.00 = $ 20,775.00 - $ 277.00 + $ 7,756.00 - $ 4,750.00