A tabular analysis of the transactions made during August 2022 by Wolfe Company during its first month of operations is shown as follows. Each increase and decrease in stockholders’ equity is explained. 

Instructions 

a. Describe each transaction. 

b. Determine how much stockholders’ equity increased for the month. 

c. Compute the net income for the month.

Transcribed Image Text:

= Liabilities + Stockholders' Equity Retained Earnings Assets Accounts Common Cash A/R + Supp. + Equip. = Payable Stock Rev. - Exp. - Div. 1. +$20,000 -1,000 +$20,000 2. +$5,000 +$4,000 3. -750 +$750 4. +4,100 +$5,400 +$9,500 Serv. Rev. 5. -1,500 -1,500 6. -2,000 -$2,000 7. -800 -$ 800 Rent Exp. 8. +450 -450 Salar. Exp. Util. Exp. 9. -3,000 -3,000 10. +300 -300