AddEx LO2 - PROBLEM 3-3 TRANSACTION ANALYSIS AND FINANCIAL...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
PROBLEM 3-3 TRANSACTION ANALYSIS AND FINANCIAL STATEMENTS LO 2 1. EXPERT CONSULTING SERVICE INC. TRANSACTIONS FOR THE MONTH OF MARCH 2006 Assets = Liabilities + Shareholders’ Equity Accounts Accounts Notes Capital Retained Date Cash Receivable Computer Supplies Payable Payable Stock Earnings 3/2 $40,000 $40,000 3/7 15,000 $ 15,000 Bal. $55,000 $15,000 $40,000 3/12 $ 700 $ 700 Bal. $55,000 $700 $700 $15,000 $40,000 3/19 $ 4,000 $ 4,000 Bal. $55,000 $4,000 $700 $700 $15,000 $40,000 $ 4,000 3/20 –1,300 –1,300 Bal. $53,700 $4,000 $700 $700 $15,000 $40,000 $ 2,700 3/22 1,000 –1,000 Bal. $54,700 $3,000 $700 $700 $15,000 $40,000 $ 2,700 3/26 2,800 2,800 Bal. $57,500 $3,000 $700 $700 $15,000 $40,000 $ 5,500 3/29 –8,000 $ 8,000 Bal. $49,500 $3,000 $8,000 $700 $700 $15,000 $40,000 $ 5,500 3/30 –3,300 –3,300 Bal. $46,200 $3,000 $8,000 $700 $700 $15,000 $40,000 $ 2,200 3/31 –1,400 –1,400 Bal. $ 44,800 $ 3,000 $ 8,000 $ 700 $ 700 $ 15,000 $ 40,000 $ 800 TOTAL ASSETS: $56,500 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY: $56,500
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2. EXPERT CONSULTING SERVICE INC. INCOME STATEMENT FOR THE MONTH ENDED MARCH 31, 2006 Revenues: Computer installation services $4,000 Software selection services 2,800 $ 6,800 Expenses: Advertising 1,300 Salaries and wages 3,300 Gas, electric, and water 1,400 6,000 Net income $ 800 3. EXPERT CONSULTING SERVICE, INC. BALANCE SHEET MARCH 31, 2006 Assets Current assets: Cash $44,800 Accounts receivable 3,000 Supplies 700 Total current assets $48,500 Property, plant, and equipment: Equipment—Computer system 8,000 Total assets $ 56,500 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 700 Long-term debt: Notes payable 15,000 Total liabilities 15,700 Capital stock $40,000 Retained earnings 800 Total shareholders' equity 40,800 Total liabilities and shareholders' equity $ 56,500 4. Trade accounts often have a 30-day collection or payment period. For example, cash should be received from the accounts receivable and cash paid for the accounts payable during the month of April.
Background image of page 2
STATEMENTS LO 2,3,4,5 1. Journal entries: Jan. 2 Cash 100,000 Capital Stock 100,000 Issued 100,000 shares for cash. Assets = Liabilities + Owners' Equity +100,000 +100,000 Jan. 3 Warehouse 60,000 Land 20,000 Cash 80,000 Purchased warehouse and land for cash. Assets = Liabilities + Owners' Equity +60,000 +20,000 –80,000 Jan. 4 Cash 50,000 Notes Payable 50,000 Signed three-year promissory note at Third State Bank. Assets
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 12

AddEx LO2 - PROBLEM 3-3 TRANSACTION ANALYSIS AND FINANCIAL...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online