Question

Solve the follwing Problem Labels;
Expenses
For the Month Ended August 31, 2018
August 31, 2018
Accounts;
Accounts payable
Auto expense
Cash
Common stock
Dividends
Miscellaneous expense
Rent expense
Retained earnings
Salaries expense
Sales commissions
Supplies
Supplies expense
Amount Descriptions;
Change in retained earnings
Net income
Net loss
Retained earnings, August 1, 2018
Retained earnings, August 31, 2018
Total assets
Total expenses
Total liabilities and stockholders’ equity
Total stockholders’ equity

On August 1, 2018, Brooke Kline established Western Realty. Brooke completed the following transactions during the month of August.

A.	Opened a business  bank account with a deposit of $27,000 in exchange for common stock.
B.	Paid rent on office and equipment for the month, $3,400.
C.	Paid automobile expenses (including rental charge) for month, $1,450, and miscellaneous expenses, $900.
D.	Purchased office supplies on account, $1,250.
E.	Earned sales commissions, receiving cash, $22,000.
F.	Paid creditor on account, $750.
G.	Paid office salaries, $2,700.
H.	Paid dividends, $3,100.
I.	Determined that the cost of supplies on hand was $500; therefore, the cost of supplies used was $750.

Required:

1.

Indicate the effect of each transaction and the balances after each transaction, using the tabular headings in the exhibit below. In each transaction row (rows indicated by a letter), you must indicate the math sign (+ or -) in columns affected by the transaction. You will not need to enter math signs in the balance rows (rows indicated by Bal.). Entries of 0 (zero) are not required and will be cleared if entered.

Assets		= Liabilities +	Stockholders’ Equity
		Accounts	Common		Sales	Salaries	Rent	Auto	Supplies	Miscellaneous
Cash	+ Supplies	= Payable	+ Stock	- Dividends	+ Commissions	- Expense	- Expense	- Expense	- Expense	- Expense

	2. a. Prepare an income statement for August. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Refer to the list of Labels, Accounts and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. You will not need to enter colons (:) on the income statement.
	2. b. Prepare a retained earnings statement for August. Refer to the list of Labels, Accounts and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. The word “Less” or “Add” is not needed in the Retained Earnings Statement. If an amount is zero, enter "0".
	2. c. Prepare a balance sheet as of August 31. Refer to the list of Labels, Accounts and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.

Answer 1

	cash	+	supplies	=	account payable	+	common stock	-	dividends	+	sales commission	-	-salaries expenses	-	rent expenses	-	auto expenses	-	supplies expenses	-	Misc.expenses
1	$27,000.00						$27,000.00
2	$ (3,400.00)														$(3,400.00)
3	$ (2,350.00)																$(1,450.00)				$(900.00)
4			$ 1,250.00		$1,250.00
5	$22,000.00										$22,000.00
6	$    (750.00)				$ (750.00)
7	$ (2,700.00)												$(2,700.00)
8	$ (3,100.00)								$(3,100.00)
9			$    (750.00)																$ (750.00)
	$36,700.00		$     500.00		$   500.00		$27,000.00		$(3,100.00)		$22,000.00		$(2,700.00)		$(3,400.00)		$(1,450.00)		$ (750.00)		$(900.00)

INCOME STATEMENT
Revenue
Sales commission		$22,000.00
Total revenue		$22,000.00
Expenses
Rent expenses		$ (3,400.00)
Salaries expenses		$ (2,700.00)
supplies expenses		$    (750.00)
Automobile expenses		$ (1,450.00)
Miscellaneous expenses		$    (900.00)
Total expenses		$ (9,200.00)
Net income		$12,800.00

STT OF RETAINED EARNINGS
Opening balance		$                  -
Add; Net income		$   12,800.00
Less : DIvidend		$     3,100.00
ENding balance		$     9,700.00

BALANCE SHEET
Assets
cash		$   36,700.00
supplies		$         500.00
Total assets		$   37,200.00
Liabilities
Account payable		$         500.00
Total liabilities		$         500.00
Shareholder's equity
common stock		$   27,000.00
retained earnings		$     9,700.00
Total shareholder's equtiy		$   36,700.00
Total liabilities and shareholder's equity		$   37,200.00