Transactions Obj. 4 On April 1 of the current year, Morgan Jones established a business to manage rental property. She completed the following transactions during April:

a. Opened a business bank account with a deposit of $60,000 in exchange for common stock.

b. Purchased office supplies on account, $1,800.

c. Received cash from fees earned for managing rental property, $22,300.

d. Paid rent on office and equipment for the month, $7,000.

e. Paid creditors on account, $1,100.

f. Billed customers for fees earned for managing rental property, $3,600.

g. Paid automobile expenses for month, $750, and miscellaneous expenses, $1,000.

h. Paid office salaries, $4,000.

i. Determined that the cost of supplies on hand was $250; therefore, the cost of supplies used was $1,550.

j. Paid dividends, $5,000.

Instructions 1 Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:

Assets 5Liabilities1 Stockholders’ Equity Accounts Cash 1 Receivable 1 Supplies5 Accounts Payable 1 Common Stock 2 Dividends 1 Fees Earned 2 Rent Expense 2 Salaries Expense 2 Supplies Expense 2 Auto Expense 2 Misc.

Expense 2 Briefly explain why issuing common stock and revenues increased stockholders’

equity, while dividends and expenses decreased stockholders’ equity.

3 Determine the net income for April.

4 How much did April’s transactions increase or decrease stockholders’ equity?

AppendixLO1