Question

Transactions: Financial Statements On April 1, 2048, Maria Adams established Custom Realty, Maria completed the following transactions during the month of April: a. Opened a business bank account with a deposit of $35,000 in exchange for common stock. b. Purchased supplies on account, $3,540. c. Paid creditor on account, $2,240 d. Earned sales commissions, receiving cash, $36,120. e. Paid rent on office and equipment for the month, $7,080. f. Paid dividends. $11,000. g. Paid automobile expenses for month, $3,400, and miscellaneous expenses, $1,630. h. Pald office salaries, 54,260. i. Determined that the cost of supplies on hand was $1,190; therefore, the cost of supplies used was $2,350. 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. If required, enter negative values as negative numbers using a minus sign. Assets - Liabilities + Stockholders' Equity Accounts Sales Common Salaries Auto Cash + Supplies - Dividends + Supplies Miscellaneous Rent Expense Payable Stock Commissions Expense Expense Expense Expense a b. Bal. C. Bal.

Answer 1

1. Indicate the effect of each transaction and the balance after each transaction? Answer: S.No. Assets = Liabilities Accounts = Payable Sales + Commissions Stockholder's Equity Rent Salaries Expense Expense Auto Expense Supplies Expense Miscellaneous Expense + Supplies Cash $ 35,000.00 + Common Stock - Dividends $ 35,000.00 a. b. Bal. $ 3,540.00 $ 3,540.00 $ 35,000.00 $ $ $ $ $ $ $ $ 3,540.00 $ 3,540.00 $ -2,240.00 $ 1,300.00 $ 3,540.00 $ 35,000.00 $ $ $ $ $ $ $ $ 36,120.00 $ 36,120.00 $ 3,540.00 $ 1,300.00 $ 35,000.00 $ $ $ $ $ $ 35,000.00 $ -2,240.00 $ 32,760.00 $ 36,120.00 $ 68,880.00 $ -7,080.00 $ 61,800.00 $ -11,000.00 $ 50,800.00 $ -5,030.00 $ 45,770.00 $ -4,260.00 $ 41,510.00 $ $ 7,080.00 $ 7,080.00 $ 3,540.00 $ 1,300.00 $ 35,000.00 $ 36,120.00 $ $ $ c. Bal. d. Bal. e. Bal. f. Bal. 9. Bal. h. Bal. i. Bal. $ $ $ 11,000.00 $ 11,000.00 $ 3,540.00 $ 1,300.00 $ 35,000.00 $ 36,120.00 $ 7,080.00 $ $ $ $ 3,400.00 $ 3,400.00 $ $ 1,630.00 $ 1,630.00 $ 3,540.00 $ 1,300.00 $ 35,000.00 $ 11,000.00 $ 36,120.00 $ 7,080.00 $ $ $ 4,260.00 $ 4,260.00 $ 1,300.00 $ 35,000.00 $ 11,000.00 $ 36,120.00 $ 7,080.00 $ 3,400.00 $ 1,630.00 $ 3,540.00 $ -2,350.00 $1,190.00 $ $ 2,350.00 $ 2,350.00 $ 41,510.00 $1,300.00 $ 35,000.00 $ 11,000.00 $36, 120.00 $7,080.00 $4,260.00 $3,400.00 $1,630.00

2. Prepare an income statement for April? Answer: Custom Realty Income Statement For the month ended April 30, 2018 Sales Commissions $ 36,120.00 Expenses: Rent Expense $7,080.00 Salaries Expense $4,260.00 Auto Expense $3,400.00 Supplies Expense $2,350.00 Miscellaneous Expense $ 1,630.00 Total Expenses $ 18,720.00 Net Income $ 17,400.00

3. Prepare a statement of stockholder's equity for April? Answer: Custom Realty Statement of Stockholders' Equity For the month ended April 30, 2018 Common Stock Retained Earr Total Balance at April 1, 2018 $ $ $ Bank Deposit $ 35,000.00 $ $ 35,000.00 Net Income for April $ $ 17,400.00 $ 17,400.00 Dividends $ $ -11,000.00 $ -11,000.00 Balance at April 30, 2018 $35,000.00 $6,400.00 $ 41,400.00

4. Prepare a balance sheet as of April 30? Answer: $ 41,510.00 $ 1,190.00 $ 42,700.00 Custom Realty Balance Sheet April 30, 2018 Assets Cash Supplies Total Assets Liabilities Accounts Payable Stockholders' Equity Common Stock $ 35,000.00 Retained Earnings $ 6,400.00 Total Stockholders' Equity Total Liabilities and Stockholders' Equity $ 1,300.00 $ 41,400.00 $ 42,700.00

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