Transactions made by virmari co a public accounting

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Transactions made by Virmari & Co., a public accounting firm, for the month of August are shown below. Prepare a tabular analysis which shows the effects of these transactions on the expanded accounting equation, similar to that shown in Illustration 1-9.1.Stockholders purchased shares of stock for $25,000 cash.2.The company purchased $7,000 of office equipment on credit.3.The company received $8,000 cash in exchange for services performed.4.The company paid $850 for this month’s rent.5.The company paid a dividend of $1,000 in cash to stockholders.4Tabular AnalysisLO 4 1.Trans-actionCash EquipmentAccountsPayableCommon StockRetained EarningsRev. Exp. Div.Assets= Liabilities +Stockholders’ Equity+++=2.4.4Tabular Analysis+++=--LO 4 3.5.
12Recording business transactionsMr. Sam Doty opened and incorporated a consulting firm during the month of September and provided you with the following data.1.Invested $8,000 in his business in exchange for common stock2.Purchased $500 of supplies on account3.Purchased $4000 of equipment on account4.Received $3,000 cash for consulting services5.Paid salaries and wages of $8006.Paid office rent for September of $2007.Paid $1,000 owed to creditor8.Paid a $1,500 dividend in cash to Sam Doty, the stockholder42Recording business transactions= Liabilities +++=+Revenues ExpensesDividends12345678#Retained EarningsCommonStockAccountsPayableEquipmentSuppliesSummary of TransactionsMonth of SeptemberCashStockholders' EquityAssets43
13Companies prepare four financial statements :Balance SheetIncome StatementStatement of Cash FlowsRetained Earnings StatementLO 5 LO 5: Describe the four financial statements and how they are preparedReports the profitability of the company’s operations over a specific period of time. Lists revenues first, followed by expenses. Shows net income (or net loss). Does not include investment and dividend transactions between the stockholders and the businessFor a Period of Time (Month, Quarter, Year)Income StatementLO 5
14= Liabilities +++=+Revenues ExpensesDividends7,500$+500$+4,000$=3,500$+8,000$3,000$(1,000)$(1,500)$CashStockholders' EquityAssets#Retained EarningsCommon StockAccountsPayableEquip‐mentSuppliesRevenuesService revenueExpenses3,000$Salaries and wages expense800Rent expense200Total Expenses1,000Net Income2,000$Income StatementFor the Month of September 201657Reports the changes in retained earnings for a specific period of time. The time period is the same as that covered by the income statement.Information provided indicates the reasons why retained earnings increased or decreased during the period.For a Period of Time (Month, Quarter, Year)Retained Earnings StatementLO 5
15= Liabilities +++=+Revenues ExpensesDividends7,500$+500$+4,000$=3,500$+8,000$3,000$(1,000)$(1,500)$CashStockholders' EquityAssets#Retained EarningsCommon StockAccountsPayableEquip‐mentSuppliesRetained Earnings, September 1$Add: Net Income2,0002,000Less: Dividends1,500Retained Earnings, September 30

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