On June 1, Maui Travel Agency, Inc., was established. The following transactions were completed during the month.
Question:
On June 1, Maui Travel Agency, Inc., was established. The following transactions were completed during the month.
1. Stockholders invested $40,000 cash, receiving common stock in exchange.
2. Paid $1,000 cash for June office rent.
3. Purchased office equipment for $5,000 cash.
4. Paid $1,000 cash for office supplies.
5. Incurred $500 of advertising costs in the Daily Maui, on account.
6. Earned $25,000 for services rendered: Cash of $12,000 is received from customers, and the balance of $13,000 is billed to customers on account.
7. Paid $750 cash dividend.
8. Paid Daily Maui amount due in transaction (4).
9. Paid employees’ salaries $2,500.
10. Cash of $10,000 is received from customers who have previously been billed in transaction (6).
Instructions
(a) Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Office Equipment, Accounts Payable, Common Stock, and Retained Earnings.
(b) From an analysis of the Retained Earnings column, compute the net income or net loss for June.
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Step by Step Answer:
MAUI TRAVEL AGENCY INC Cash Accounts Receivable Supplies Office Equipment Accounts Payable Common St...View the full answer
Hospitality Financial Accounting
ISBN: 978-0470083604
2nd Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Agnes L.
