Reference no: EM133132488
Question - Analyzing Transactions Using the Financial Statement Effects Template - Hanlon Advertising Company began the current month with the following balance sheet.
|
Cash
|
$80,000
|
Liabilities
|
$70,000
|
|
Noncash assets
|
135,000
|
Contributed capital
|
110,000
|
|
|
Earned capital
|
35,000
|
|
Total assets
|
$215,000
|
Total liabilities and equity
|
$215,000
|
Following are summary transactions that occurred during the current month.
1. The company purchased supplies for $5,000 cash; none were used this month.
2. Services of $2,500 were performed this month on credit.
3. Services were performed for $10,000 cash this month.
4. The company purchased advertising for $8,000 cash; the ads will run next month.
5. The company received $1,200 cash as partial payment on accounts receivable from transaction 2.
6. The company paid $3,400 cash toward the accounts payable balance reported at the beginning of the month.
7. Paid $3,500 cash toward this month's wages expenses.
8. The company declared and paid dividends of $500 cash.
(a) Record the effects of each transaction using the financial statement effects template.
(b) Prepare the income statement for this month and the balance sheet as of month-end.