Accounting problem : Analyze transactions and compute net income

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Problem 3-2A

Nina Finzelberg started her own consulting firm, Finzelberg Consulting Inc., on May 1, 2014. The following transactions occurred during the month of May.

May 1 Stockholders invested $ 17,619 cash in the business in exchange for common stock.
2 Paid $ 705 for office rent for the month.
3 Purchased $ 587 of supplies on account.
5 Paid $ 176 to advertise in the County News.
9 Received $ 1,644 cash for services performed.
12 Paid $ 235 cash dividend.
15 Performed $ 4,933 of services on account.
17 Paid $ 2,937 for employee salaries.
20 Paid for the supplies purchased on account on May 3.
23 Received a cash payment of $ 1,410 for services performed on account on May 15.
26 Borrowed $ 5,873 from the bank on a note payable.
29 Purchased office equipment for $ 2,349 paying $ 235 in cash and the balance on account.
30 

Paid $ 211 for utilities.

 

 

 

 

1)Show the effects of the above transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 3-3 for example.)  

 

2) Prepare an income statement for the month of May 2014.

3) Prepare a classified balance sheet at May 31, 2014. (List current assets in order of liquidity)

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