On June 1 of the current year, Chad Wilson established a business to manage rental property. He completed the following transactions during June: a. Opened a business bank account with a deposit of $30,000 from personal funds. b. Purchased office supplies on account, $1,800. c. Received cash from fees earned for managing rental property, $10,000 d. Paid rent on office and equipment for the month, $4,500. e. Paid creditors on account, $1,250. f. Billed customers for fees earned for managing rental property, $16,800 g. Paid automobile expenses (including rental charges) for the month, $750, and miscel- laneous expenses, $980. h. Paid officee salaries, $4,000 Determined that the cost of supplies on hand was $680; therefore, the cost of supplies used was $1,120. i j. Withdrew cash for personal use, $7,500 Instructions 1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings: Owner's Equity Assets = Liabilities+ Chad Wilson, Accounts Accounts Chad Wilson, Supplies Earned Expense - Expense - Expense Expense Expense Fees Rent Salaries Auto Misc. CashReceivable Supplies= Payable + Capital Drawing Briefly explain why the owner's investment and revenues increased owner's 2. equity, while withdrawals and expenses decreased owner's equity 3. Determine the net income for June. 4. How much did June's transactions increase or decrease Chad Wilson's capital?
On June 1 of the current year, Chad Wilson established a business to manage rental property. He completed the following transactions during June: a. Opened a business bank account with a deposit of $30,000 from personal funds. b. Purchased office supplies on account, $1,800. c. Received cash from fees earned for managing rental property, $10,000 d. Paid rent on office and equipment for the month, $4,500. e. Paid creditors on account, $1,250. f. Billed customers for fees earned for managing rental property, $16,800 g. Paid automobile expenses (including rental charges) for the month, $750, and miscel- laneous expenses, $980. h. Paid officee salaries, $4,000 Determined that the cost of supplies on hand was $680; therefore, the cost of supplies used was $1,120. i j. Withdrew cash for personal use, $7,500 Instructions 1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings: Owner's Equity Assets = Liabilities+ Chad Wilson, Accounts Accounts Chad Wilson, Supplies Earned Expense - Expense - Expense Expense Expense Fees Rent Salaries Auto Misc. CashReceivable Supplies= Payable + Capital Drawing Briefly explain why the owner's investment and revenues increased owner's 2. equity, while withdrawals and expenses decreased owner's equity 3. Determine the net income for June. 4. How much did June's transactions increase or decrease Chad Wilson's capital?
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter1: Asset, Liability, Owner’s Equity, Revenue, And Expense Accounts
Section: Chapter Questions
Problem 1PB: In July of this year, M. Wallace established a business called Wallace Realty. The account headings...
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Question
Transcribed Image Text:On June 1 of the current year, Chad Wilson established a business to manage rental
property. He completed the following transactions during June:
a. Opened a business bank account with a deposit of $30,000 from personal funds.
b. Purchased office supplies on account, $1,800.
c. Received cash from fees earned for managing rental property, $10,000
d. Paid rent on office and equipment for the month, $4,500.
e. Paid creditors on account, $1,250.
f. Billed customers for fees earned for managing rental property, $16,800
g. Paid automobile expenses (including rental charges) for the month, $750, and miscel-
laneous expenses, $980.
h. Paid officee salaries, $4,000
Determined that the cost of supplies on hand was $680; therefore, the cost of supplies
used was $1,120.
i
j. Withdrew cash for personal use, $7,500
Instructions
1. Indicate the effect of each transaction and the balances after each transaction, using
the following tabular headings:
Transcribed Image Text:Owner's Equity
Assets
= Liabilities+
Chad Wilson,
Accounts
Accounts
Chad Wilson,
Supplies
Earned Expense - Expense - Expense Expense Expense
Fees
Rent
Salaries
Auto
Misc.
CashReceivable Supplies= Payable +
Capital
Drawing
Briefly explain why the owner's investment and revenues increased owner's
2.
equity, while withdrawals and expenses decreased owner's equity
3. Determine the net income for June.
4. How much did June's transactions increase or decrease Chad Wilson's capital?
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