Kinney’s Repair Ltd was started on May 1. A summary of May transactions is presented below.
1.Shareholders invested $10.000 cash in the business in exchange for ordinary shares
2.Purchased equipment for $5.000 cash
3.Paid $400 cash for May office rent
4.Paid $700 cash for supplies
5.Incurred $250 of advertising costs in the Beacon News on account
6.Received $4.700 in cash from customers for repair service
7.Declared and paid a $1.000 cash dividend
8.Paid part time employee salaries $1.000
9.Paid utility bills $160
10.Performed repair service worth $980 on account
11.Collected cash of $120 for services billed in transactionn (10)
Instructions
a.Prepare a tabular analysis of the transactions, using the following column headings: Cash, Account Receivable, Supplies, Equipment, Account Payable, Share Capital, and Retained Earnings (with separate columns for Revenues, Expenses, and Dividens). Include margin explanations for any changes in Retained Earning. Revenue is called Service Revenue
b.From an analysis of Retained Earnings columns, compute the net income or net loss for May.
Answer
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