Question

Transactions

On June 1 of the current year, Pamela Schatz established a business to manage rental property. She completed the following transactions during June:

1. Opened a business bank account with a deposit of $55,000 from personal funds.
2. Purchased office supplies on account, $3,300.
3. Received cash from fees earned for managing rental property, $18,300.
4. Paid rent on office and equipment for the month, $8,300.
5. Paid creditors on account, $2,290.
6. Billed customers for fees earned for managing rental property, $30,800.
7. Paid automobile expenses (including rental charges) for the month, $1,380, and miscellaneous expenses, $1,800.
8. Paid office salaries, $7,300.
9. Determined that the cost of supplies on hand was $1,250; therefore, the cost of supplies used was $2,050.
10. Withdrew cash for personal use, $13,800.

Required:

1. Indicate the effect of each transaction and the balances after each transaction:
For those boxes in which no entry is required, leave the box blank.
For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)

Assets Liabilities Owner's Equity Accounts Receivable Accounts Payable Pamela Schatz, Capital Pamela Schatz, Drawing Fees Earned Rent Expense Salaries Expense Supplies Expense Auto Expense Misc. Expense Item Cash + + Supplies + + b. Bal. Bal. d. Bal. Bal. f. Bal. 9. Bal. h. Bal. i. Bal. j. 2. Owner's equity is the right of owners to the assets of the business. These rights are increased by owner's investments and revenues and decreased by owner's withdrawals and expenses. 3. Determine the net income for June. $ 28,270 ✓ 4. June's transactions (a-j) increased or decreased Pamela Schatz's capital to? Increased to s

Answer 1

1		Assets	=	Liabilities	+	Owner's equity
	Item	Cash	+	Accounts receivable	+	Supplies	=	Accounts payable	+	Pamela schatz,Capital	-	Pamela schatz,Drawing	+	Fees earned	-	Rent expense	-	Salaries expense	-	Supplies expense	-	Auto expense	-	Misc. expense
	a.	55000								55000
	b.					3300		3300
	Bal.	55000		0		3300		3300		55000		0		0		0		0		0		0		0
	c.	18300												18300
	Bal.	73300		0		3300		3300		55000		0		18300		0		0		0		0		0
	d.	-8300														8300
	Bal.	65000		0		3300		3300		55000		0		18300		8300		0		0		0		0
	e.	-2290						-2290
	Bal.	62710		0		3300		1010		55000		0		18300		8300		0		0		0		0
	f.			30800										30800
	Bal.	62710		30800		3300		1010		55000		0		49100		8300		0		0		0		0
	g.	-3180																				1380		1800
	Bal.	59530		30800		3300		1010		55000		0		49100		8300		0		0		1380		1800
	h.	-7300																7300
	Bal.	52230		30800		3300		1010		55000		0		49100		8300		7300		0		1380		1800
	I.					-2050														2050
	Bal.	52230		30800		1250		1010		55000		0		49100		8300		7300		2050		1380		1800
	j.	-13800										13800
	Bal.	38430		30800		1250		1010		55000		13800		49100		8300		7300		2050		1380		1800

2 These rigths are increased by owner's investments and revenues and decreased by owner's withdrawals and expenses. 3 Net income: $ $ 49100 8300 7300 Fees earned Less:Expenses Rent expense Salaries expense Supplies expense Auto expense Misc. expense Net income 2050 1380 1800 20830 28270 4 Increase in Pamela schatz's capital: $ Pamela schatz, Capital Add:Net income 55000 28270 83270 Less:Pamela schatz, Drawing Increase in Pamela schatz's capital 13800 69470