Accounting Problems Essay

E3-4
A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below. Each increase and decrease in stockholders’ equity is explained.

Instructions (a) Describe each transaction. 1. The company issued shares of stock to stockholders for 20,000 cash. 2. The company purchased $4,000 of equipment on the account and paid $1,000 cash towards equipment. 3. The company purchased $750 in supplies with cash 4. Company gained $9,500 in retained earnings. $5,400 in accounts receivable and $4,100 in cash. 5. Company paid $1,500 cash toward accounts payable 6. Company paid 2,000 cash toward dividends 7. Company paid $800 cash for rent 8. A payment of $450 cash was made to accounts receivable 9. A payment of $3,000 cash was made for Sal. Expenses 10. $300 payment made from accounts payable for utilities

(b) Determine how much stockholders’ equity increased for the month.
The Stockholder’s equity for the month
Issued Stock- 20,000
Service Revenue- 9,500
Dividends- (2,000)
Rent- (800)
Salaries- (3,000)
Utilities-(300)
Increases in Stockholder’s Equity- 23,400

(c) Compute the net income for the month. The net income for the month was $5,400 1. Service revenue- 9,500 2. Rent-(800) 3. Salaries-(3,000) 4. Utilities-(300)

E3-9 The May transactions of StepAside Corporation were as follows.

May 4 Paid $700 due for supplies previously purchased on account. 7 Performed advisory services on account for $6,800. 8 Purchased supplies for $850 on account. 9 Purchased equipment for $1,000 in cash. 17 Paid employees $530 in cash. 22 Received bill for equipment repairs of $900. 29 Paid $1,200 for 12 months of insurance policy.