Question

On June 1 of the current year, Wilson Wood opened Woody's Web Services, Inc. The corporation had the following transactions during June.

a. Opened a business checking account and made a deposit, $4,000. In exchange, Wilson was issued 200 shares of $20 par value stock.

b. Paid rent for June for office space and computer equipment, $2,000.

c. Purchased office supplies (stamps, pens, etc.) on account, $680.

d. Received cash for services rendered, $3,500.

e. Paid creditor for office supplies purchased on account, $500.

f. Purchased office supplies for cash, $190.

g. Billed clients for consultations performed on account, $4,400.

h. Paid the monthly internet service bill of $180.

i. Paid the secretary's salary of $2,400.

j. Declared and paid dividends of $500.

k. Received cash from clients previously billed, $1,500.

l. Returned $150 of office supplies purchased in transaction f above. Received a full refund.

REQUIRED

1) You are to record these transactions using a spreadsheet format. Click the Answer tab and enter your name in cell C5. Then click the Worksheet tab and enter your name in cell C1 of the worksheet. There are six formulas needed to complete the worksheet.   Enter the formulas in the appropriate cells. Then enter the increases and decreases resulting from each transaction on the worksheet. For example, the first transaction increases the cash account by $8,000 and also increases the common stock account by $8,000. This transaction has already been recorded on the worksheet. Enter negative numbers with a minus sign (-). The worksheet will automatically total each column as values are entered in that column. When you are finished, check line 27 to make sure that total assets equal total liabilities and equity.

2) It has been determined that the cost of the supplies used during the month was $300. Record the increase or decrease in the appropriate columns on the worksheet. This is Transaction m. Save the completed file as FTRANS2. Print the worksheet. Also print your formulas. Check figure: Ending cash balance (cell B22), $2,020

3) How does Transaction m differ from Transactions a through I? In other words, why is it treated as a special item?

4) Prepare an income statement, a statement of retained earnings, and a balance sheet in good form for Woody's Web Services, Inc for the month of June.

Answer 1

Solution:

	Assets	=	Liabilities	+	Shareholders Equity
	Transaction	+	Accounts	+	Office	+	Equipment		Notes	+	Accounts	+	Paid - in-	+	Retained	+	Revenue	-	Expenses
	Cash		Receivables		Supplies				Payable		Payable		Capital		Earnings
	8000												8000
a.	4000												4000
b.	-2000																		-2000
c.					680						680
d.	3500																3500
e.	-500										-500
f.	-190				190
g			4400														4400
h.	-180																		-180
i.	-2400																		-2400
j.	-500														-500
k.	1500		-1500
l	150				-150
Total	11380		2900		720						180		12000		-500		7900		ekkarill92 Next > < Previous Related Solutions On June 1 of the current year, Chad Wilson established a business to manage rental property.... On June 1 of the current year, Chad Wilson established a business to manage rental property. He completed the following transactions during June: Opened a business bank account with a deposit of $48,000 from personal funds. Purchased office supplies on account, $2,080. Received cash from fees earned for managing rental property, $5,770. Paid rent on office and equipment for the month, $2,550. Paid creditors on account, $950. Billed customers for fees earned for managing rental property, $4,730. Paid automobile expenses... Transactions On June 1 of the current year, Chad Wilson established a business to manage rental... Transactions On June 1 of the current year, Chad Wilson established a business to manage rental property. 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