Question

Nona Curry started her own consulting firm, Metlock, Inc., on May 1, 2017. The following transactions occurred during the month of May Stockholders invested $18,450 cash in the business in exchange for common stock. 2 Paid $738 for office rent for the month. 3 May 1 5 9 12 15 17 20 23 26 29 30 Purchased $615 of supplies on account. Paid $185 to advertise in the County News Received $1,722 cash for services performed Paid $246 cash dividen Performed $5,166 of services on account. Paid $3,075 for employee salaries Paid for the supplies purchased on account on May 3 Received a cash payment of $1,476 for services performed on account on May 15 Borrowed $6,150 from the bank on a note payable Purchased office equipment for $2,460 paying $246 in cash and the balance on account. Paid $221 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 wit in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the parti reduced. See Illustration 3-3 for example.) METLOCK, INC. Assets Liabilities Accounts Receivable Notes Payable Accounts Payable Common + Date Cash + Supplies Equipment Stock May 1 May 2 May 3 May 5 May 9 May 12

Answer 1

Ans-

					Assets			=	Liabilities +				Stockholders' Equity
															Retained Earnings
Date	Cash	+	Accounts Receivables	+	Supplies	+	Equipment	=	Notes Payable	+	Accounts Payable	+	Common Stock	+	Revenue	-	Expenses	-	Dividends
May 01	18,450												18,450
May 02	-738																738
May 03					615						615
May 05	-185																185
May 09	1,722														1,722
May 12	-246																		246
May 15			5,166												5,166
May 17	-3,075																3,075
May 20	-615										-615
May 23	1,476		-1,476
May 26	6,150								6,150
May 29	-246						2,460				2,214
May 30	-221																221
Total	$22,472	+	$3,690	+	$615	+	$2,460	=	$6,150	+	$2,214	+	$18,450	+	$6,888	-	$4,219	-	$246
	Assets $29,237							=	Liabilities $8,364	+	Stockholders' Equity $20,873

METLOCK INC.

Income Statement

For the Month Ended May 31, 2017

Revenue :
Total Service Revenue		$6,888
Less: Expenses:
Rent Expenses	$738
Advertising Expenses	$185
Salaries Expenses	$3,075
Utilities Expenses	$221
Total Expenses		$4,219
Net Income		$2,669

METLOCK INC.

Balance Sheet

As at May 31, 2017

Assets:
Current Assets:-
Cash	$22,472
Accounts Receivable	$3,690
Supplies	$615
Total Current Assets		$26,777
Equipment		$2,460
Total Assets		$29,237
Liabilities and Stockholders' Equity
Current Liabilities:
Notes Payable	$6,150
Accounts Payable	$2,214
Total Current Liabilities		$8,364
Stockholders' Equity
Common Stock	$18,450
Retained Earnings (	$2,423
Total Stockholders' Equity		$20,873
Total Liabilities and Stockholders' Equity		$29,237

Computation of Retained Earnings:-

Opening Retained Earnings	$0
Add: Net Income of the year	$2,669
	$2,669
Less: Dividend Paid	$246
Retained Earnings at the end of the month	$2,423

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