Reference no: EM13508427

Transactions

Mandy Deal established a business on Sept 1 of this year to manage rental property. She completed the following transactions during September:

1. Opened a business bank account with a deposit of $40,000 in exchange for capital stock.
2. Purchased supplies (pens, file folders, and copy paper) on account, $2,200.
3. Received cash from fees earned for managing rental property, $6,000.
4. Paid rent on office and equipment for the month, $2,700.
5. Paid creditors on account, $1,000.
6. Billed customers for fees earned for managing rental property, $5,000.
7. Paid automobile expenses (including rental charges) for month, $600, and miscellaneous expenses, $300.
8. Paid office salaries, $1,900.
9. Determined that the cost of supplies on hand was $1,300; therefore, the cost of supplies used was $900.
10. Paid dividends, $1,800.

1. Indicate the effect of each transaction and the balances after each transaction:
For those boxes in which no entry is required, leave the box blank.
For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)

2. Briefly explain why the stockholders' investment and revenues increased stockholders' equity, while dividends and expenses decreased stockholders' equity.

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

blank Item 229

3. Determine the net income for September.
$

4. How much did September's transactions increase or decrease retained earnings?