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 $215,000 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

Hanlon Advertising Company Retained Earnings Statement Retained earnings, beginning of the month Add: Net Income Less: Dividends Retained earnings, end of month $35,000 $9,000 $500 $43,500 Hanlon Advertising Company Balance Sheet Liabilities $70,800 Contributed capital $149,300 Retained Earnings $220,100 Total liabilities and equity Cash Non cash assets $66,600 $110,000 $43,500 $220,100 Total assets