Question: On September 1 of the current year Linda Cross established

On September 1 of the current year, Linda Cross established a business to manage rental property. She completed the following transactions during September:
a. Opened a business bank account with a deposit of $40,000 from personal funds.
b. Purchased supplies on account, $2,200.
c. Received cash from fees earned for managing rental property, $6,000.
d. Paid rent on office and equipment for the month, $2,700.
e. Paid creditors on account, $1,000.
f. Billed customers for fees earned for managing rental property, $5,000.
g. Paid automobile expenses for the month, $600, and miscellaneous expenses, $300.
h. Paid office salaries, $1,900.
i. Withdrew cash for personal use, $1,800.
1. Indicate the effect of each transaction using the following tabular headings:
2. Briefly explain why the owner’s investment and revenues increased owner’s equity, while withdrawals and expenses decreased owner’s equity.
3. Determine the net income for September.
4. How much did September’s transactions increase or decrease Linda Cross’ capital?

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  • CreatedSeptember 15, 2015
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