Question

Karla Tanner opens a web consulting business called Linkworks and completes the following transactions in its first month of operations.
Prepare journal entries for each transaction and identify the financial statement impact of each entry.
The financial statements are automatically generated based on the journal entries recorded.

Apr.		1		Tanner invested $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
Apr.		2		The company prepaid $9,000 cash for 12 months' rent for office space. The company's policy is record prepaid expenses in balance sheet accounts.
Apr.		3		The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
Apr.		6		The company completed services for a client and immediately received $4,000 cash.
Apr.		9		The company completed a $6,000 project for a client, who must pay within 30 days.
Apr.		13		The company paid $11,600 cash to settle the account payable created on April 3.
Apr.		19		The company paid $2,400 cash for the premium on a 12-month insurance policy. The company's policy is record prepaid expenses in balance sheet accounts.
Apr.		22		The company received $4,400 cash as partial payment for the work completed on April 9.
Apr.		25		The company completed work for another client for $2,890 on credit.
Apr.		28		The company paid $5,500 cash in dividends.
Apr.		29		The company purchased $600 of additional office supplies on credit.
Apr.		30		The company paid $435 cash for this month’s utility bill.

The financial statements report the cumulative impact of all transactions recorded as of the financial statement date. Input the cumulative amount of a) Net Income (Loss), b) Total Assets, c) Total Liabilities, and d) Total Equity that would be reported on the financial statements immediately after each transaction is recorded. (Hint: You can check your work by selecting the date on the trial balance tab.) The first two transactions are completed for you!

Transaction: Net Income Total Assets Total Liabilities Total Equity Where can you go to find each of your answers? Income statement Balance sheet Balance sheet Balance sheet Apr. 1 Tanner invested $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock. $0 $106,000 $0 $106,000 Apr. 2 The company prepaid $9,000 cash for 12 months’ rent for office space. The company's policy is record prepaid expenses in balance sheet accounts. 0 106,000 0 106,000 Apr. 3 The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days. 0 11,600 Apr. 6 The company completed services for a client and immediately received $4,000 cash. Apr. 9 The company completed a $6,000 project for a client, who must pay within 30 days. Apr. 13 The company paid $11,600 cash to settle the account payable created on April 3. Apr. 19 The company paid $2,400 cash for the premium on a 12-month insurance policy. The company's policy is to record prepaid expenses in balance sheet accounts. Apr. 22 The company received $4,400 cash as partial payment for the work completed on April 9. Apr. 25 The company completed work for another client for $2,890 on credit. Apr. 28 The company paid $5,500 cash in dividends. Apr. 29 The company purchased $600 of additional office supplies on credit. Apr. 30 The company paid $435 cash for this month’s utility bill.

Answer 1

Transaction:	Net Income	Total Assets	Total Liabilities	Total Equity
Where can you go to find each of your answers?	Income statement	Balance sheet	Balance sheet	Balance sheet
Apr. 1 Tanner invested $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.	$0	$106,000	$0	$106,000
Apr. 2 The company prepaid $9,000 cash for 12 months’ rent for office space. The company's policy is record prepaid expenses in balance sheet accounts.	0	106,000	0	106,000
Apr. 3 The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.	0	117,600	11,600	106000
Apr. 6 The company completed services for a client and immediately received $4,000 cash.	4000	121,600	11,600	110000
Apr. 9 The company completed a $6,000 project for a client, who must pay within 30 days.	10000	127,600	11,600	116000
Apr. 13 The company paid $11,600 cash to settle the account payable created on April 3.	10000	116,000	0	116000
Apr. 19 The company paid $2,400 cash for the premium on a 12-month insurance policy. The company's policy is to record prepaid expenses in balance sheet accounts.	10000	116000	0	116000
Apr. 22 The company received $4,400 cash as partial payment for the work completed on April 9.	10000	116000	0	116000
Apr. 25 The company completed work for another client for $2,890 on credit.	12890	118890	0	118890
Apr. 28 The company paid $5,500 cash in dividends.	12890	113390	0	113390
Apr. 29 The company purchased $600 of additional office supplies on credit.	12890	113990	600	113390
Apr. 30 The company paid $435 cash for this month’s utility bill.	12455	113555	600	112955