Question

Analyzing Transactions Using the Financial Statement Effects Template Following are selected transactions of Mogg Company. Record the effects of each using the financial statement effects template. 1. Shareholders contribute $10,000 cash to the business in exchange for common stock 2. Employees earn $500 in wages that have not been paid at period end. 3. Inventory of $3,000 is purchased on credit. 4. The inventory purchased in transaction 3 is sold for $4.500 on credit. 5. The company collected the $4.500 owed to it per transaction 4 6. Equipment is purchased for $5,000 cash. 7. Depreciation of $1.000 is recorded on the equipment from transaction 8. The Supplies account had a $3,800 balance at the beginning of this period, a physical count at period end show that 5800 of supplies are still available. No supplies were purchased during this period 9. The company paid $12,000 con toward the principal on a note payable: 50, 5500 cash is paid to cover this notes interest expense for the period. 10. The company receives $8.000 cash in advance for services to be delivered next period, Use negative signs with your answers when appropriate Hint: For transaction 4. enter the net effect amount for balance sheet answers,

Answer 1

														Amount $
Transaction	Cash Asset	+	Non Cash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital	Revenue	-	Expense	=	Net Income
1	10,000			=			10,000
2				=	500				-500			500	=	-500
3			3,000	=	3,000
4			1,500	=					1,500	4,500	-	3,000	=	1,500
5	4,500		-4,500	=
6	-5,000		5,000	=
7			-1,000	=					-1,000			1,000	=	-1,000
8			-3,000	=					-3,000			3,000	=	-3,000
9	-12,500			=	-12,000				-500			500	=	-500
10	8,000			=	8,000

Working:

4 Non cash assets = 1,500 ( 4,500 - 3,000 _

8 Non Cash Assets = -3,000 ( 3,800 - 800 )