Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Karla Tanner opens a web consulting business called Linkworks and completes the following transactions in its first month of operations. Prepare journal entries for each

Karla Tanner opens a web consulting business called Linkworks and completes the following transactions in its first month of operations. Prepare journal entries for each transaction and identify the financial statement impact of each entry. The financial statements are automatically generated based on the journal entries recorded.

April 1 Tanner invested $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
April 2 The company prepaid $9,000 cash for 12 months' rent for office space. The company's policy is to record prepaid expenses in balance sheet accounts.
April 3 The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
April 6 The company completed services for a client and immediately received $4,000 cash.
April 9 The company completed a $6,000 project for a client, who must pay within 30 days.
April 13 The company paid $11,600 cash to settle the account payable created on April 3.
April 19 The company paid $2,400 cash for the premium on a 12-month prepaid insurance policy. The company's policy is to record prepaid expenses in balance sheet accounts.
April 22 The company received $4,400 cash as partial payment for the work completed on April 9.
April 25 The company completed work for another client for $2,890 on credit.
April 28 The company paid $5,500 cash in dividends.
April 29 The company purchased $600 of additional office supplies on credit.
April 30

The company paid $435 cash for this months utility bill.

The financial statements report the cumulative impact of all transactions recorded as of the financial statement date. Input the cumulative amount of a) Net Income (Loss), b) Total Assets, c) Total Liabilities, and d) Total Equity that would be reported on the financial statements immediately after each transaction is recorded.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental accounting principle

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

21st edition

1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587

More Books

Students also viewed these Accounting questions