On April 1, DeDonder Travel Agency Inc. was established. These transactions were

Question

On April 1, DeDonder Travel Agency Inc. was established. These transactions were completed during the month.

(a) Prepare a tabular analysis of the above transactions. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 3-3 for example.)

DEDONDER TRAVEL AGENCY INC.

Assets

Liabilities

Stockholders’ Equity

Cash

Equipment

Retained Earnings

Dividends

(b) From an analysis of the Retained Earnings columns, compute the net income or net loss for April

1. Stockholders invested $29,298 cash in the company in exchange for common stock. 2. Paid $865 cash for April office rent. 3. Purchased office equipment for $3,675 cash. 4. Purchased $126 of advertising in the Chicago Tribune, on account. 5. Paid $507 cash for office supplies. 6. Performed services worth $11,995. Cash of $2,782 is received from customers, and the balance of $9,213 is billed to customers on account. 7. Paid $354 cash dividends. 8. Paid Chicago Tribune amount due in transaction (4). 9. Paid employees’ salaries $1,439. 10. Received $9,213 in cash from customers billed previously in transaction (6).

Explanation / Answer

S.No. Cash+ Accounts Receivable + Supplies + Equipment = Accounts Payable+ Common stock + Retained Earnings Revenues- Expenses- Dividends 1 29298 0 0 0 0 29298 0 0 0 2 -865 0 0 0 0 0 0 865 0 3 -3675 0 0 3675 0 0 0 0 0 4 0 0 0 0 126 0 0 126 0 5 -507 0 507 0 0 0 0 0 0 6 2782 9213 0 0 0 0 11995 0 0 7 -354 0 0 0 0 0 0 0 354 8 -126 0 0 0 -126 0 0 0 0 9 -1439 0 0 0 0 0 0 1439 0 10 9213 -9213 0 0 0 0 0 0 0 Total 34327 0 507 3675 0 29298 11995 2430 354

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