Acc290 Principles of Accounting: E3-4 A tabular analysis of the transactions made during August 2012

Acc290 Principles of Accounting

E3-4
A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below. Each increase and decrease in stockholders’ equity is explained. ASSETS LIABILITIES STOCKHOLDERS' EQUITY
Retained Earnings
Cash Accounts Rec. Supplies Equip. Accounts Payable Common Stock Revenue Expense Dividends
1 20,000 20,000 common stock
2 (1,000) 5,000 4,000
3 (750) 750
4 4,100 5,400 9,500 service revenue
5 (1,500) (1,500)
6 (2,000) (2,000) dividends
7 (800) (800) rent expense
8 450 (450)
9 (3,000) (3,000) salaries expense
10 300 (300) utilities expense
15,500 4,950 750 5,000 2,800 20,000 9,500 (4,100) (2,000)

Instructions
(a) Describe each transaction.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the net income for the month.
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