Reconstructing Events from Information in the Accounting Database Jill Jones has just established a security alarm maintenance service. She charges $20 per hour per person and is paid by check upon completion of the job. Her expenses are rather low— usually only supplies and transportation. Following are the entries to the accounting system that were made for the first seven transactions of the company.
|
ASSETS |
= |
LIABILITIES |
+ |
OWNERS’ EQUITY |
||
|
Date |
Accounts |
Cash |
Other |
Contributed |
Retained |
|
|
Cash |
5,000 |
|||||
|
Contributed Capital |
5,000 |
|||||
|
Supplies Inventory |
300 |
|||||
|
Cash |
300 |
|||||
|
Cash |
4,200 |
|||||
|
Service Revenues |
4,200 |
|||||
|
Utilities Expense |
450 |
|||||
|
Cash |
450 |
|||||
|
Transportation Expense |
500 |
|||||
|
Cash |
500 |
|||||
|
Insurance Expense |
500 |
|||||
|
Cash |
700 |
|||||
|
Retained Earnings |
1,300 |
|||||
|
Cash |
1,300 |
|||||
|
Ending Amounts |
5,950 |
+300 |
= |
+ |
5,000 |
+1,250 |
Required
A. For each transaction, describe the event that caused the entry to be made.
B. How much income (or loss) did the company earn?