Practice Do It Review 1 Transactions made by Morlan and Co a

Practice Do It! Review 1 Transactions made by Morlan and Co., a law firm, for the month of March are shown below 1. The company performed $23,000 of services for customers, on credit. 2. The company received $23,000 in cash from customers who had been billed for services (in transaction 1) 4. The company paid a dividend of $5,500 in cash to stockholders. Prepare a tabular analysis which shows the effects of these transactions on the accounting equation. (If an amount reduces the account balance then enter with a negative sign preceding The company received a bill for $2,400 of advertising, but will not pay it until a later date the number e.g. -15,000 or parenthesis (15,000).) Assets Liabilities Stockholders\' Equity Retained Earnin Dividends Cash + Accounts ReceivableAccounts Payable+ Common Stock Revenues Expenses

Solution

Assets = Liabilities + Shareholders Equity Cash + Accounts Receivable = Accounts payable + Common stock + Revenues - Expenses - Dividends 1. 23,000 23,000 2. 23,000 -23,000 3. 2,400 -2,400 4. -5,500 -5,500