A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operation.
Assets = Liabilities + Stockholders’ Equity
Office Accounts Common Retained Earnings
Cash + A/R + Supp. + Equip. = Payable + Stock + Rev. – Exp. – Div.
1. +$20,000 +$20,000 Com. Stock
2. -1,000 +$5,000 +$4,000
3. -750 +$750
4. +4,400 +$5,400 +$9,800 Serv. Rev.
5. -1,500 -1,500
6. -2,000 -$2,000 Div.
7. -800 -$ 800 Rent Exp.
8. +450 -450
9. -3,000 -3,000 Sal. Exp.
10. +500 -500 Util. Exp.
Hint: Analyze transaction and compare net income (SO 1)
Instructions
(a) describe each transaction
(b) Determine how much stockholder’s equity increased for the month
(c) Compute the net income for the month