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The following transactions occurred during a recent year: Paid wages of $450 for the current period (example). Borrowed $2,250 cash from local bank using a
The following transactions occurred during a recent year:
- Paid wages of $450 for the current period (example).
- Borrowed $2,250 cash from local bank using a short-term note.
- Purchased $900 of equipment on credit.
- Earned $180 of sales revenue; collected cash.
- Received $360 of utilities services, on credit.
- Earned $780 of service revenue, on credit.
- Paid $135 cash on account to a supplier.
- Incurred $35 of travel expenses; paid cash.
- Earned $180 of service revenue; collected half in cash, with balance on credit.
- Collected $65 cash from customers on account.
- Incurred $160 of advertising costs; paid half in cash, with balance on credit.
Required:
- For each of the transactions, complete the following table, indicating the account, amount, and direction of the effect (+ for increase and for decrease) of each transaction under the accrual basis. Include revenues and expenses as subcategories of stockholders equity, as shown for the first transaction, which is provided as an example.
- Determine the companys preliminary net income.
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