Problems

P1.1(LO 3,4)On April 1, Julie Chen established Miaoli's Travel Agency. The following transactions were completed during the month.

Analyze transactions and compute net income.

• 1.Shareholders invested NT$15,000 cash in the business in exchange for ordinary shares.
• 2.Paid NT$600 cash for April office rent.
• 3.Purchased equipment for NT$3,000 cash.
• 4.Incurred NT$700 of advertising costs for Facebook ads, on account.
• 5.Paid NT$900 cash for office supplies.
• 6.Performed services worth NT$10,000: NT$3,000 cash is received from customers, and the balance of NT$7,000 is billed to customers on account.
• 7.Declared and paid NT$600 dividend.
• 8.Paid Facebook NT$500 of the amount due in transaction (4).
• 9.Paid employees' salaries NT$2,500.
• 10.Received NT$4,000 in cash from customers who have previously been billed in transaction (6).

Check figuresprovide a key number to let you know you are on the right track.

Instructions

a.Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Share CapitalOrdinary, Revenues, Expenses, and Dividends.

Total assets NT$20,800

b.From an analysis of the retained earnings columns, compute the net income or net loss for April.

Net income NT$6,200