Exercises 2-7, 2-17, 2-18 and 2-19 E2-7 Effects of transactions on accounting equation Obj|1, 2, 4 Describe how the following business transactions affect the three elements of the accounting equation. · a.Received

Exercises 2-7, 2-17, 2-18 and 2-19

E2-7

Effects of transactions on accounting equation

Obj|1, 2, 4

Describe how the following business transactions affect the three elements of the accounting equation.

· a.Received cash for services performed.

· b.Paid for utilities used in the business.

· c.Borrowed cash at local bank.

· d.Issued capital stock for cash.

· e.Purchased land for cash.

E2-17

Income statement

Obj|3, 5

After its first month of operation, the following amounts were taken from the accounting records of Benjamin Realty Inc. as of April 30, 2013.

Prepare an income statement for the month ending April 30, 2013.

Capital stock

$25,000

Notes payable

$35,000

Cash

53,000

Rent expense

5,000

Dividends

10,000

Retained earnings

Interest expense

2,000

Salaries expense

75,000

Land

42,000

Sales commissions

145,000

Miscellaneous expense

3,000

Utilities expense

15,000

✓ Net income, $45,000

E2-18

Retained earnings statement

Obj|3, 5

✓ Retained earnings, April 30, 2013, $35,000

Using the financial data shown in Exercise 2-17 for Benjamin Realty Inc., prepare a retained earnings statement for the month ending April 30, 2013.

E2-19

Balance sheet

Obj|3, 5

✓ Total assets, $95,000

Using the financial data shown in Exercise 2-17 for Benjamin Realty Inc., prepare a balance sheet as of April 30, 2013.

10 years ago

Report issue

Exercises 2-7, 2-17, 2-18 and 2-19 E2-7 Effects of transactions on accounting equation Obj|1, 2, 4 Describe how the following business transactions affect the three elements of the accounting equation. · a.Received

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