2024 – Problem 3 2A Nina Finzelberg started her own consulting firm Finzelberg Consulting Inc on May 1 2014 The following transactions occurred
Accounting problem : Analyze transactions and compute net income – 2024
Problem 3-2A
Nina Finzelberg started her own consulting firm, Finzelberg Consulting Inc., on May 1, 2014. The following transactions occurred during the month of May.
| May 1 | Stockholders invested $ 17,619 cash in the business in exchange for common stock. | |
| 2 | Paid $ 705 for office rent for the month. | |
| 3 | Purchased $ 587 of supplies on account. | |
| 5 | Paid $ 176 to advertise in the County News. | |
| 9 | Received $ 1,644 cash for services performed. | |
| 12 | Paid $ 235 cash dividend. | |
| 15 | Performed $ 4,933 of services on account. | |
| 17 | Paid $ 2,937 for employee salaries. | |
| 20 | Paid for the supplies purchased on account on May 3. | |
| 23 | Received a cash payment of $ 1,410 for services performed on account on May 15. | |
| 26 | Borrowed $ 5,873 from the bank on a note payable. | |
| 29 | Purchased office equipment for $ 2,349 paying $ 235 in cash and the balance on account. | |
| 30 |
Paid $ 211 for utilities.
1)Show the effects of the above transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year. (If a transaction causes a decrease in Assets, Liabilities or Stockholders’ Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 3-3 for example.)
2) Prepare an income statement for the month of May 2014. 3) Prepare a classified balance sheet at May 31, 2014. (List current assets in order of liquidity) |
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