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Analyzing Transactions Using the Financial Statement Effects Template
Following are selected transactions of Mogg Company. Record the effects of each using the financial statement effects template.
Shareholders contribute $5,000 cash to the business in exchange for common stock.
Employees earn $250 in wages that have not been paid at period-end.
Inventory of $1,500 is purchased on credit.
The inventory purchased in transaction 3 is sold for $2,250 on credit.
The company collected the $2,250 owed to it per transaction 4.
Equipment is purchased for $2,500 cash.
Depreciation of $500 is recorded on the equipment from transaction 6.
The Supplies account had a $3,800 balance at the beginning of this period; a physical count at period-end shows that $400 of supplies are still available. No supplies were purchased during this period.
The company paid $5,000 cash toward the principal on a note payable; also, $250 cash is paid to cover this note’s interest expense for the period.
The company receives $4,000 cash in advance for services to be delivered next period.
Use negative signs with your answers, when appropriate.
Hint: For transaction 4, enter net effect amount for balance sheet answers.
| Balance Sheet | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Cash Asset |
+ | Noncash Assets |
= | Liabilities | + | Contributed Capital |
+ | Earned Capital |
|
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| Income Statement | ||||
|---|---|---|---|---|
| Revenue | – | Expenses | = | Net Income |
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