On April 1, Julie Spengel established Spengel's Travel Agency. The following transactions were completed during the month:
- Invested $15,000 cash to start the agency
- Paid $600 cash for April office rent.
- Purchased equipment for $3,000 cash.
- Incurred $700 of advertising costs in the Chicago Tribune, on account.
- Paid $900 cash for office supplies.
- Performed services worth $10,000: $3,000 cash is received from customers, and the balance of $7,000 is billed to customers on account.
- Withdrew $600 cash for personal use
- Paid Chicago Tribune $500 of the amount due in transaction (4).
- Paid employees salaries $2,500.
- Received $4,000 in cash from customers who have previously been billed in transactions (6);
Instructions
- Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Owner's Capital, Owner's Drawings, Revenues, and Expenses.
- From an analysis of the owner's equity columns, compute the net income or net loss for April.
Solution
