Acc290 Financial Accounting: E3-4 A tabular analysis of the transactions made during August 2010

Acc290 Financial Accounting

E3-4
A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operations is shown below. Each increase and decrease in stockholders' equity is explained.
Assets = Liabilities + Stockholders' Equity
Cash + Accounts Receivable + Supplies + Office Equipment = Accounts Payable + Common Stock + Retained Earnings
Rev. - Exp. - Div.
1. $20,000 $20,000 Com. Stock
2. -1,000 $5,000 $4,000
3. -750 $750
4. 4,400 $5,400 $9,800 Serv. Rev
5. -1,500 -1,500
6. -2,000 -2,000 Div.
7. -800 -800 Rent Exp.
8. 450 -450
9. -3,000 -3,000 Sal. Exp.
10. 500 -500 Util. Exp.

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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