Analyzing Transactions Using the Financial Statement Effects Template
Hanlon Advertising Company began the current month with the following balance sheet.

Cash	$ 80,000	Liabilities	$ 70,000
Noncash assets	135,000	Contributed capital	110,000
		Earned capital	35,000
Total assets	$215,000	Total liabilities and equity	$215,000

Following are summary transactions that occurred during the current month.

The company purchased supplies for $5,000 cash; none were used this month.

Services of $2,500 were performed this month on credit.

Services were performed for $10,000 cash this month.

The company purchased advertising for $8,000 cash; the ads will run next month.

The company received $1,200 cash as partial payment on accounts receivable from transaction 2.

The company paid $3,400 cash toward the accounts payable balance reported at the beginning of the month.

Paid $3,500 cash toward this month's wages expenses.

The company declared and paid dividends of $500 cash.

(a) Record the effects of each transaction using the financial statement effects template.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Beginning bal.	Answer		Answer		Answer		Answer		Answer
1	Answer		Answer		Answer		Answer		Answer
2	Answer		Answer		Answer		Answer		Answer
3	Answer		Answer		Answer		Answer		Answer
4	Answer		Answer		Answer		Answer		Answer
5	Answer		Answer		Answer		Answer		Answer
6	Answer		Answer		Answer		Answer		Answer
7	Answer		Answer		Answer		Answer		Answer
8	Answer		Answer		Answer		Answer		Answer
Ending balance	Answer		Answer		Answer		Answer		Answer

Income Statement
Revenue	-	Expenses	=	Net Income
Answer		Answer		Answer
Answer		Answer		Answer
Answer		Answer		Answer
Answer		Answer		Answer
Answer		Answer		Answer
Answer		Answer		Answer
Answer		Answer		Answer
Answer		Answer		Answer
Answer		Answer		Answer
Answer		Answer		Answer

(b) Prepare the income statement for this month and the balance sheet as of month-end.

Hanlon Advertising Company Income Statement
Sales revenue	$Answer
Total expenses (enter as a positive)	Answer
Net income	$Answer

Hanlon Advertising Company Retained Earnings Reconciliation
	Common Stock
Retained earnings. beginning of month	$Answer
Add: Net income	Answer
Less: Dividends (enter as a negative)	Answer
Retained earnings. end of month	$Answer

Hanlon Advertising Company

Balance Sheet

Cash	$Answer
Noncash assets	Answer
Total assets	$Answer

Liabilities	$Answer
Contributed capital	Answer
Retained earnings	Answer
Total equity	Answer
Total liabilities and equity	$Answer

Answer rating: 100% (QA)

a BALANCE SHEET INCOME STATEMENT Non Cash Contributed Transaction Cash Asse... View the full answer