The tabular analysis of transactions for Wolfe Company is presented in E3.4. 

Instructions 

Prepare an income statement and a retained earnings statement for August and a classified balance sheet at August 31, 2022. 

Data from E3.4

A tabular analysis of the transactions made during August 2022 by Wolfe Company during its first month of operations is shown as follows. Each increase and decrease in stockholders’ equity is explained. 

Instructions 

a. Describe each transaction. 

b. Determine how much stockholders’ equity increased for the month. 

c. Compute the net income for the month. 

Transcribed Image Text:

Stockholders' Equity = Liabilities + Assets Retained Earnings Accounts + Supp. + Equip. = Payable Common Exp. - Div. Cash A/R Stock Rev. 1. +$20,000 +$20,000 2. 3. 4. 5. 6. 7. +$5,000 +$4,000 -1,000 -750 +$750 +$5,400 +$9,500 Serv. Rev. +4,100 -1,500 -1,500 -$2,000 Rent Exp. -2,000 -$ 800 -800 8. +450 -450 Salar. Exp. Util. Exp. 9. -3,000 -3,000 -300 10. +300