Accounting in Action

Trixie Maye started her own consulting firm, Matrix Consulting, on May 1, 2018. The following transactions occurred during the month of May
  1. Trixie invested $7,000 cash in the business.
  2. Paid $900 for office rent for the month
  3. Purchased $600 for office rent for the month
  4. Paid $125 to advertise in the County News.
  5. Received $4,000 cash for services performed.
  6. Withdrew $1,000 cash for personal use
  7. Performed $5,400 of services on account.
  8. Paid $2,500 for employee salaries.
  9. Paid for the supplies purchased on account on May 3.
  10. Received a cash payment of $4,000 for services performed on account on May 15.
  11. Borrowed $5,000 from the bank on a note payable.
  12. Purchased equipment for $4,200 on account.
  13. Paid $275 for utilities

Instructions

  1. Show the effects of the previous transactions on the accounting equation using the following format:
    DateAssets
    Cash + Accounts Receivable + Supplies + Equipment
    = Liabilities
    Notes Payable + Accounts Payable
    + Owner's Equity
    Owner's Capital - Owner's Drawings + Revenues - Expenses.
  2. Prepare an income statement for the month of May
  3. Prepare a balance sheet at May 31,2018

Solution

(i)
(ii)
(iii)
Are you need Live help? Chat with us for quick help.

Latest Articles

« »