M.E. Carter launched Carter Company, a professional services firm on March 1. The firm will prepare financial statements at each month-end. In March (its first month), Carter executed the following transactions. Enter the transactions, a through g, into the financial statement effects template below. a. Carter (owner) invested in the company $100,000 cash and $20,000 in property and equipment. The company issued common stock to Carter. b. The company paid $3,200 cash for rent of office furnishings and facilities for March. c. The company performed services for clients and immediately received $4,000 cash earned. d. The company performed services for clients and sent a bill for $24,000 with payment due within 60 days. e. The company compensated an office employee with $4,800 cash as salary for March. f. The company recieved $10,000 cash as partial payment on the amount owed from clients in transaction d. g. The company paid $935 cash in dividends to Carter (owner).

Use negative signs with answers, if appropriate.

						Balance Sheet								Income Satement
Transaction		Cash Asset	+	Noncash Assets	=	Liabilities	+	Contrib. Capital	+	Earned Capial		Revenues	-	Expenses	=	Net income
a. Issued stock for cash and PPE.		Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer
b. Paid rent.		Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer
c. Performed services for cash.		Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer
d. Performed services on account.		Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer
e. Paid wages.		Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer
f. Received payments on accounts receivable.		Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer
g. Paid dividends		Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer

nalyzing Transactions Using the Financial Statement Effects Template Following are selected transactions of Mogg Company. Record the effects of each using the financial statement effects template.

1. Shareholders contribute $10,000 cash to the business in exchange for common stock.
2. Employees earn $500 in wages that have not been paid at period-end.
3. Inventory of $3,000 is purchased on credit.
4. The inventory purchased in transaction 3 is sold for $4,500 on credit.
5. The company collected the $4,500 owed to it per transaction 4.
6. Equipment is purchased for $5,000 cash.
7. Depreciation of $1,000 is recorded on the equipment from transaction 6.
8. The Supplies account had a $3,800 balance at the beginning of this period; a physical count at period-end shows that $800 of supplies are still available. No supplies were purchased during this period.
9. The company paid $12,000 cash toward the principal on a note payable; also, $500 cash is paid to cover this note's interest expense for the period.
10. The company receives $8,000 cash in advance for services to be delivered next period.

Use negative signs with your answers, when appropriate. Hint: For transaction 4, enter the net effect amount for balance sheet answers.

	Balance Sheet										Income Statement
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital		Revenue	-	Expenses	=	Net Income
1	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer	=	Answer
2	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer	=	Answer
3	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer	=	Answer
4	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer	=	Answer
5	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer	=	Answer
6	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer	=	Answer
7	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer	=	Answer
8	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer	=	Answer
9	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer	=	Answer
10	Answer		Answer	=	Answer		Answer		Answer		Answer	-	Answer