Question

1170252Fwebas Sapling Learning... 239 Now playing... Rihanna American... * Bookmarks T: Translate by Google Translate F Google Docs | 0 apter 3 Homework Saved 10 The following transactions occurred during a recent year 23 ints Skipped a. Paid wages of $1,400 for the current period (example) b. Borrowed $7,000 cash from local bank using a short term note. c. Purchased $2,800 of equipment on credit d Earned $560 of sales revenue, collected cash e. Received $1120 of utilities services, on credit Earned $2,370 of service revenue, on credit g. Paid $420 cash on account to a supplier hincurred $95 of travel expenses, paid cash Earned $560 of service revenue; collected half in cash, with balance on credit Collected $150 cash from customers on account k. Incurred $400 of advertising costs, paid half in cash, with balance on credit eBook Hint References Required: 1. For each of the transactions, complete the following table, indicating the account amount, and direction of the effect (+ for increase and - for decrease) of each transaction under the accrual basis. Include revenues and expenses as subcategories of stockholders' equity, as shown for the first transaction, which is provided as an example 2. Determine the company's preliminary net income

Answer 1

ANSWER 1

ASSET

=

LIABILITIES

+

SHAREHOLDERS'S EQUITY

CASH	ACCOUNT RECEVIABLE	EQUIPMENT		ACCOUNT PAYABLE		REVENUES	EXPENSES
-1600							-1600
+7000				+7000
		+2800		+2800
+560						+560
				+1120			-1120
	+2370					+2370
-420				-420
-95							-95
+280	+280					+560
+150	-150
-200				+200			-400
5675	2500	2800		10700		3490	-3215

ANSWER 2

NET INCOME= REVENUE-EXPENSES

=3490-3215=275

275 IS THE NET INCOME OF THE COMPANY