On October 1, 2014, Kevin Bosley established Sunrise Realty. Kevin completed the following transactions during the month of October:

a. Opened a business bank account with a deposit of $18,000 in exchange for capital stock.

b. Purchased office supplies on account, $3,200.

c. Paid creditor on account, $1,800.

d. Earned sales commissions, receiving cash, $36,750.

e. Paid rent on office and equipment for the month, $4,000.

f. Paid dividends, $3,000.

g. Paid automobile expenses (including rental charge) for month, $2,500, and miscellaneous expenses, $1,200.

h. Paid office salaries, $3,750.

i. Determined that the cost of supplies on hand was $1,550; therefore, the cost of supplies used was $1,650.

Instructions
1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
2. Prepare an income statement for October, a retained earnings statement for October, and a balance sheet as of October31.

Transcribed Image Text:

Assets Liabilities + Accounts Capital Payable Stockholders' Equity Sales Rent Salaries Auto Supplies Misc. Expense-Expense-Expense-Expense Cash + Supplies + Stock-Dividends + Commissions- Expense-