Question

Transactions On September 1 of the current year, Joy Tucker established a business to manage rental property. She completed the following transactions during September: a. Opened a business bank account with a deposit of $45,000 in exchange for common stock b. Purchased office supplies on account, $1,950. c. Received cash from fees earned for managing rental property, $5,460. d. Pald rent on office and equipment for the month, $2,390. e. Paid creditors on account, $880. f. Billed customers for fees earned for managing rental property, $4,420. 9. Paid automobile expenses for month, $530, and miscellaneous expenses, $270. h. Paid office salaries, $1,680. i. Determined that the cost of supplies on hand was $1,150; therefore, the cost of supplies used was $500. 1. Pald dividends $1,590. 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 Stockholders' Equity Accounts Accounts Common Fees Rent Sal. Item Cash Supplies Dividends Receivable Payable Stock Earned Expense Expense + + Sur Expe b. Bal. Bal. d. Bal. e. Bal

Answer 1

Answer

	Assets	=	Liabilities	+	Stock holders' equity
Item	Cash	+	Accounts receivable	+	Supplies	=	Accounts payable	+	Common stock	-	Dividents	+	Fees earned	-	Rent expense	-	Salaries expense	-	Supplies expense	-	Auto expense	-	Miscellaneous expense	Item
a	45,000	+		+		=		+	45,000	-		+		-		-		-		-		-		a.
b		+		+	1,950	=	1,950	+		-		+		-		-		-		-		-		b.
Balance	45,000	+		+	1,950	=	1,950	+	45,000	-		+		-		-		-		-		-		Balance
c	5,460	+		+		=		+		-		+	5,460	-		-		-		-		-		c.
Balance	50,460	+		+	1,950	=	1,950	+	45,000	-		+	5,460	-		-		-		-		-		Balance
d	-2,390	+		+		=		+		-		+		-	2,390	-		-		-		-		d.
Balance	48,070	+		+	1,950	=	1,950	+	45,000	-		+	5,460	-	2,390	-		-		-		-		Balance
e	-880	+		+		=	-880	+		-		+		-		-		-		-		-		e.
Balance	47,190	+		+	1,950	=	1,070	+	45,000	-		+	5,460	-	2,390	-		-		-		-		Balance
f		+	4,420	+		=		+		-		+	4,420	-		-		-		-		-		f.
Balance	47,190	+	4,420	+	1,950	=	1,070	+	45,000	-		+	9,880	-	2,390	-		-		-		-		Balance
g	-800	+		+		=		+		-		+		-		-		-		-	530	-	270	g.
Balance	46,390	+	4,420	+	1,950	=	1,070	+	45,000	-		+	9,880	-	2,390	-		-		-	530	-	270	Balance
h	-1,680	+		+		=		+		-		+		-		-	1,680	-		-		-		h.
Balance	44,710	+	4,420	+	1,950	=	1,070	+	45,000	-		+	9,880	-	2,390	-	1,680	-		-	530	-	270	Balance
i		+		+	-800	=		+		-		+		-		-		-	800	-		-		i.
Balance	44,710	+	4,420	+	1,150	=	1,070	+	45,000	-		+	9,880	-	2,390	-	1,680	-	800	-	530	-	270	Balance
j	-1,590	+		+		=		+		-	1,590	+		-		-		-		-		-		j.
Balance	43,120	+	4,420	+	1,150	=	1,070	+	45,000	-	1,590	+	9,880	-	2,390	-	1,680	-	800	-	530	-	270	Balance

For more details, see the table below:

	Accounts involved	Debit	Credit	increase/decrease
a.	Cash	45,000		increase
	Common stock		45,000	increase
b.	Supplies	1,950		increase
	Accounts payable		1,950	increase
c	Cash	5,460		increase
	Fees earned		5,460	increase
d	Rent expense	2,390		increase
	Cash		2,390	decrease
e	Accounts payable	880		decrease
	Cash		880	decrease
f	Accounts receivable	4,420		increase
	Fees earned		4,420	increase
g	Auto expense	530		increase
	Miscellaneous expense	270		increase
	Cash		800	decrease
h	Salaries expense	1,680		increase
	Cash		1,680	decrease
i	Supplies expense	800		increase
	Supplies		800	decrease
j	Dividents	1,590		increase
	Cash		1,590	decrease