Question

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P1-4B Gloria Rodd started a consulting firm, Rodd Consulting, on May1, 2015. The following transactions occurred during the month of May. 1 Accounting in Action 44 Analvze transactions and prepare financial statements. (LO 6, 7, 8) Rodd invested $8.000 cash in the business in exchange for stock. Paid $800 for office rent for the month. Purchased $500 of supplies on account. Paid $90 to advertise in the County News. Received $3,000 cash for services performed. Declared and paid a $700 cash dividend. Performed $3,500 of services on account. Paid $2,100 for employee salaries. Paid for the supplies purchased on account on May 3. Received a cash payment of $2,500 for services performed on account on May 1 2. 12 15 17 20 23 May 15. Borrowed $5,000 from the bank on a note payable. Purchased equipment for $2,600 on account. Paid $150 for utilities. 26 29 30 Instructions (al Total assets $18,260 (a) Show the effects of the previous transactions on the accounting equation using the following format. Assets Liabilities Stockholders' Equity Accounts Date Cash + + Supplies + Equipment Notes Accounts Common Stock Retained Earmings Exp. Receivable Payable Payable Rev. - - Div. Include margin explanations for any changes in the Retained Earnings account in your analysis. (b) Prepare an income statement for the month of May. (e) Prepare a balance sheet at May 31, 2015. (b) Net income $3,360 (d Cash $14,160 Determine financial statement P1-5B Finanoial

P1-4B parts a,b, and c

Answer 1

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Date Page pati Liability I crabilities Stockholder Equity nssets Count Alc + Suppy - Nolegt Afc Common Rodain earning Recei grup pay Pay Stock Row - Exp - Diu 8000 may! 8000 may ? (800) (800) SOOSOO (90) May 3 - may 5 (go) Maya 3000 May 12 (70) mayis • 3500 3000 (700) 2506 may 17 (2100) @100) (500) May 20 (506) may 23 2500 (2500) may 26 5000 5000 May 29 2600 2600 - May 30 (150) (150) - Total 14160 1000 500 2600 5ooo about 8000 6500 (3140) (700) Total (het) 18260 7600 10660

b) Income Statement for may Revenue sale of service Total Revenue 6500 65oo 800 Expenses Office Rent Advertisement Salaries Utilities - Total expenses 2100 150 3190 Det profit (6500-3/40) 3360 c) Balance sheet on May 31, 2015 Dont Liabilities ont Assets Current Assets Current liability cash 14160 Notes payable sooo Account Receiv 1000 Alc payable 2600 Supplies 500 Stockholdes equity Property, plant & Common stock 8000 Equipment Retained Equipment 2600 earning 2666 1960 18260