On April 1, Crossroads Travel Agency, Inc. was established. The following transactions LO13 were completed during the
Question:
On April 1, Crossroads Travel Agency, Inc. was established. The following transactions LO13 were completed during the month.
1. Stockholders invested $20,000 cash, receiving common stock in exchange.
2. Paid $800 cash for April office rent.
3. Purchased office equipment for $2,500 cash.
4. Incurred $300 of advertising costs in the Chicago Tribune, on account.
5. Paid $750 cash for office supplies.
6. Earned $12,000 for services rendered: Cash of $3,000 is received from customers, and the balance of $9,000 is billed to customers on account.
7. Paid $500 cash dividend.
8. Paid Chicago Tribune amount due in transaction (4).
9. Paid employees’ salaries $1,500.
10. Cash of $7,000 is received from customers who have previously been billed in transaction (6).
Instructions
(a) Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Office Equipment, Accounts Payable, Common Stock, and Retained Earnings.
(b) From an analysis of the Retained Earnings column, compute the net income or net loss for April.
Step by Step Answer:
Hospitality Financial Accounting
ISBN: 9780471270553
1st Edition
Authors: Jerry J Weygandt, Donald E Kieso, Paul D Kimmel, Agnes L DeFranco