McGrewP_MBA 733 1-3

McGrewP_MBA 733 1-3 - Trish McGrew MBA 733 Prof Bowsher...

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Trish McGrew MBA 733, Prof. Bowsher Assignment 1-3 Problem 1-4 a. Explain each transaction 1. Owner's invested $20,000 in cash to start the business. They received common stock 2. Paid $5,000 of $7,000 for equipment 3. Paid $1000 for supplies 4. Paid $4,500 employees salaries with cash 5. Unsure Maybe revenue earned 6. Paid $1,500 of the $2,000 debt 7. Customer paid $1,000 on their account 8. Paid $750 cash for rent 9. Paid $500 cash for utilities 10. Charged $200 to company for travel 11. Unsure please advise b. List the changes in the company's balance sheet during the month of July Cash decreased $7250 Incurred $6,150 in operating expenses c. Prepare an income statement for the month Acme Consulting Income Statement For the month ended July 2010 Sales Revenue $10,000 Gross Margin $10,000 Less Operating Expense $6,150 Net Income $3,850 d. Explain the Changes in Cash account Cash began with $20,000 but then decreased by $5,000 due to purchase of equipment Decreased again with the purchase of $1,000 worth of supplies Decreased again with the payment of $4,500 in wages Increased by $5,000 due to revenue Decreased $1,500 to pay on a debt Increase $1,000 due to payment received
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