Question

Chapter 1 Problems: Set B and compute net KP1-18 On Apni 1. Bill Taylor established Tavlor Made Travel Agency. The following Analyze tra transactions were completed during the month. 1. Stockholders invested $8,000 cash in the business in exchange for common stock income. 2. Paid $400 cash for April office rent. (LO 3,4) 3. Purchased office equipment for $2,500 cash. 4. Incurred $300 of advertising costs in the Chicago Tribune, on account. 5. Paid $500 cash for office supplies. 6. Performed services worth $8,500: $2,000 cash is received from customers, and the balance of $6,500 is billed to customers on account 7. Declared and paid a $200 cash dividend. 8. Paid Chicago Tribune amount due in transaction (4). 9. Paid employees 10. Received $5,700 in cash from customers billed previously in transaction (6). Instructions (a) Ending cash (a) Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, $9,800 Common Stock, and Retained Earnings (with separate columns for Revenues, Expenses, and Dividends). Include margin explanation for any changes in Retained Earnings. (b) From an analysis of the Retained Eamings columns, compute the net income or (b) Net Income $5,800 net loss for April

Answer 1

As per policy we have to answer first question

Solution: Part-1) ASSETS Retained earnings Accounts Payable + Common Stock 8,000 + Revenue - Expenses - Dividends |(400) 300 (300) Accounts Cash + Receivable + Supplies + Equipment = 1 8000 8000 2 -400(400) 3-2500(2,500) 2,500 40 -500 (500) 500 000 6 2000 2000 6,500 7 -200 (200) 8 -300 (300) 9-2000 (2000) 10 5700 5700 (5,700) 1 9,800 + 800+ 500+ 2,500 = 8,500 |(200) (300) |(2,000) 0 + 8,000 + 8,500 - 2,700 - 200 Part-2) 8,500 Service Revenue Expenses: Salaries and wages expense Rent expense Advertising expense Net income 2,000 400 300 2,700 5,800