Accounting problem : analyze transactions and compute net income

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)