Question

Analyzing Transactions Using the Financial Statement Effects Template Hanlon Advertising Company began the current month with the following balance sheet. Cash $ 80.000 Liabilities $ 70,000 Noncash assets 135,000 Contributed capital 110.000 Earned capital 35.000 Total assets $215,000 Total liabilities and equity 5215,000 Following are summary transactions that occurred during the current month. 1. The company purchased supplies for $5,000 cash; none were used this month. 2. Services of $2,500 were performed this month on credit 3. Services were performed for $10,000 cash this month. 4. The company purchased advertising for $8,000 cash; the ads will run next month. 5. The company received $1,200 cash as partial payment on accounts receivable from transaction 2. 6. The company paid $3,400 cash toward the accounts payable balance reported at the beginning of the month. 7. Paid $3,500 cash toward this month's wages expenses 8. The company declared and paid dividends of $500 cash. (a) Record the effects of each transaction using the financial statement effects template. Use negative signs with your answers, when appropriate.

Answer 1

Income statement Net Revenue Expenses = income Balance sheet Noncash Contributed Earned Transaction Cash asset + assets = Liabilities + capital + capital Beginning Bal. $ 80,000+ $ 135,000/= $ 70,000+ $ 110,000+ $ 35,000 1 $5,000+ $5,000/= + | + 2 + $ 2,500/= + + $2,500 3 $ 10,000+ + | + $ 10,000 4 $ 8,000 + $ 8,000/= + + 5 $ 1,200 + -$ 1,200 + + 6 -$3,400 + $ 3,400 + + 7 $ 3,500+ + $ 3,500 8 -$ 500+ + + $ 500 Ending bal. $ 70,800 + $ 149,300 $ 66,600+ $ 110,000+ $ 43,500 $ 2,500 $ 10,0001- $ 2,5001 $ 10,000 + $3,500 -$3,500 $ 12,500 - $3,500 $9,000

Hanlon Advertising Company Income statement Sales revenue $ 12,500 Total expenses $ 3,500 Net income $9,000