Assessing Financial Statement Effects of Transactions (LOI) Services, a firm pro
ID: 2491081 • Letter: A
Question
Assessing Financial Statement Effects of Transactions (LOI) Services, a firm providing art services for advertisers, began business on June 1. The following accounts are needed to record the transactions for June: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Service Fees Earned; Rent Expense; Utilities Expense; and Wages Expense. Record the following transactions for June using the financial statement effects template. June I M. DeFond invested $12.000 cash to begin the business in exchange for common stock. Paid $950 cash for June rent. Purchased $6,400 of office equipment on credit. Purchased $3,800 of art materials and other supplies; the company paid $1,800 cash with the remainder due within 30 days. Billed clients $4,700 for services rendered. Collected $3,250 cash from clients on their accounts billed on June Paid $5,000 cash toward the account for office equipment (sec June Paid $900 cash for dividends. Paid $350 cash for June utilities. Paid $2,500 cash for June wages.Explanation / Answer
Solution:
Statement showing the transactions for June using the financial statement effects template:
Balance Sheet
Income Statement
Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital June 1 12,000 + 0 = 0 + 12,000 + 0 June 2 (950) + 0 = 0 + 0 + (950) June 3 0 + 6,400 = 6,400 + 0 + 0 June 6 (1,800) + 3,800 = 2,000 + 0 + 0 June 11 0 + 4,700 = 0 + 0 + 4,700 June 17 3,250 + (3,250) = 0 + 0 + 0 June 19 (5,000) + 0 = (5,000) + 0 + 0 June 25 (900) + 0 = 0 + 0 + (900) June 30 (350) + 0 = 0 + 0 + (350) June 30 (2,500) + 0 = 0 + 0 + (2,500) Total 3,750 11,650 3,400 12,000 0