On September 1 of the current year, Maria Eds all established a business to manage rental property. She completed the following transactions during September:
a. Opened a business bank account with a deposit of $40,000 in exchange for capital stock.
b. Purchased supplies (pens, file folders, and copy paper) on account, $2,200.
c. Received cash from fees earned for managing rental property, $6,000.
d. Paid rent on office and equipment for the month, $2,700.
e. Paid creditors on account, $1,000.
f. Billed customers for fees earned for managing rental property, $5,000.
g. Paid automobile expenses (including rental charges) for month, $600, and miscellaneous expenses, $300.
h. Paid office salaries, $1,900.
i. Determined that the cost of supplies on hand was $1,300; therefore, the cost of sup-plies used was $900.
j. Paid dividends, $1,800.
1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
2. Briefly explain why the stockholders investments and revenues increased stockholders equity, while dividends and expenses decreased stockholders equity.
3. Determine the net income for September.
4. How much did Septembers transactions increase or decrease retained earnings?
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