Question
The following information is for the M & N Fashion Consulting, Inc. M & N Fashion provides consulting services to clients. Below is the balances
The following information is for the M & N Fashion Consulting, Inc. M & N Fashion provides
consulting services to clients. Below is the balances at the end of February 20Y5:
Balances as of February 28, 20Y5
Cash $2,500
A/P $5,000
I.S. (Income Statement) $6,300
A/R $6,000
Unearned Revenue $2,000
SCF (Statement of Cash Flow) $2,500
Prepaid Insurance $4,800
Retained Earnings $6,300
1) Record the transactions below on the worksheet for the month of March 20Y5.
March 1 Issued a loan from the bank for $10,000.
March 2 Purchased equipment for $8,000 on account.
March 5 Received $6,500 cash from the issuance to capital stock to its sole
stockholder, Sally, who is the owner of firm.
March 7 Received $4,500 cash from customers for services previously
provided that was on account.
March 9 Purchased supplies $3,500 cash.
March 13 Paid $4,000 for the equipment that was purchased on March 2nd
March 15 Performed services for a customer on account, $3,000.
March 20 Paid wages for $1,200.
March 28 Paid $850 to the bank on the loan, of which $200 was interest and the rest
was a repayment of the loan.
March 30 Paid dividends of $700 to its shareholder, Sally.
March 31 An adjustment is needed: Supplies on hand was $2,800.
March 31 An adjustment was made: Insurance expired, $1,200.
March 31 An adjustment is needed: Equipment depreciated $600 for the month.
March 31 An adjustment was made: Unearned Revenue is earned, $2,000.
2) What effects do all adjustments have on the balance sheet? Income statement? Statement
of cash flows?
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