Transactions; financial statements
On April 1, 2014, Maria Adams established Custom Realty. Maria completed the following transactions during the month of April:
1. Opened a business bank account with a deposit of $24,000 in exchange for capital stock.
2. Paid rent on office and equipment for the month, $3,600.
3. Paid automobile expenses (including rental charge) for month, $1,350, and miscellaneous expenses, $600.
4. Purchased office supplies on account, $1,200.
5. Earned sales commissions, receiving cash, $19,800.
6. Paid creditor on account, $750.
7. Paid office salaries, $2,500.
8. Paid dividends, $3,500.
9. Determined that the cost of supplies on hand was $300; therefore, the cost of supplies used was $900.
Instructions
1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
|
Assets |
– |
Liabilities |
+ |
Stockholder’s equity |
||||||||||||||
|
Cash + Supplies |
– |
Accounts Payable |
+ |
Capital Stock |
– |
Dividends |
+ |
Sales Commissions |
– |
Rent Expense |
– |
Salaries Expense |
– |
Auto Expense |
– |
Supplies Expense |
– |
Misc. Expense |
2. Prepare an income statement for April, a retained earnings statement for April, and a balance sheet as of April 30.