(Learning Objective 1: Analyzing transactions) This question concerns the items and the amounts that two entities, Nashua Co., and Ditka Hospital, should report in their fi nancial statements.

During September, Ditka provided Nashua with medical exams for Nashua employees and sent a bill for $46,000. On October 7, Nashua sent a cheque to Ditka for $34,000. Nashua began September with a cash balance of $57,000; Ditka began with cash of $0.

❙ Requirements 1. For this situation, show everything that both Nashua and Ditka will report on their September and October income statements and on their balance sheets at September 30 and October 31.

2. After showing what each company should report, briefl y explain how the Nashua and Ditka data relate to each other.

Quiz Test your understanding of transaction analysis by answering the following questions. Select the best choice from among the possible answers.