BUS $231-$ CHAPTERS $1$ & $2$ GRADED PROBLEM

PROBLEM $1$: Squeaky Clean Window Washing Inc. was started on May $1.$ Here is

a summary of the May transactions:

Stockholders invested $$20,000$ cash in the company in exchange for common

stock.

Purchased equipment for $$9,000$ cash.

Paid $$700$ cash for May office rent.

Paid $$300$ cash for supplies.

Purchased $$750$ of advertising in the Beacon News on account.

Received $$7,200$ in cash from customers for service.

Paid a $$500$ cash dividend.

Paid part$-$time employee salaries $$1,700.$

Paid utility bills $$140.$

Provided service on account to customers $$1,00.$

Collected cash of $$650$ for services billed in transaction $(10).$

Instructions:

$($a$)$ Prepare a tabular analysis of the transactions using these column headings:

Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Common

Stock, and Retained Earnings $($with separate columns for Revenues, Expenses,

and Dividends$).$ Revenue is called Service Revenue. Include margin explanations

for any changes in Retained Earnings.

$($b$)$ From an analysis of the Retained Earnings columns, compute the net income

or net loss for May.