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How transactions affect the accounting equation, homework help
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Exercises 2-7, 2-17, 2-18 and 2-19
E2-7
Effects of transactions on accounting equation
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Describe how the following business transactions affect the three elements of the accounting equation.
· a.Received cash for services performed.
· b.Paid for utilities used in the business.
· c.Borrowed cash at local bank.
· d.Issued capital stock for cash.
· e.Purchased land for cash.
E2-17
Income statement
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After its first month of operation, the following amounts were taken from the accounting records of Benjamin Realty Inc. as of April 30, 2013.
Prepare an income statement for the month ending April 30, 2013.
Capital stock |
$25,000 |
Notes payable |
$ 35,000 |
Cash |
53,000 |
Rent expense |
5,000 |
Dividends |
10,000 |
Retained earnings |
0 |
Interest expense |
2,000 |
Salaries expense |
75,000 |
Land |
42,000 |
Sales commissions |
145,000 |
Miscellaneous expense |
3,000 |
Utilities expense |
15,000 |
✓ Net income, $45,000
E2-18
Retained earnings statement
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✓ Retained earnings, April 30, 2013, $35,000
Using the financial data shown in Exercise 2-17 for Benjamin Realty Inc., prepare a retained earnings statement for the month ending April 30, 2013.
E2-19
Balance sheet
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✓ Total assets, $95,000
Using the financial data shown in Exercise 2-17 for Benjamin Realty Inc., prepare a balance sheet as of April 30, 2013.