On April 1, Larkspur, Inc. was established. These transactions were completed during the month. ...
Question:
On April 1, Larkspur, Inc. was established. These transactions were completed during the month.
1. Stockholders invested $29,600 cash in the company in exchange for common stock.
2. Paid $690 cash for April office rent.
3. Purchased office equipment for $2,980 cash.
4. Purchased $110 of advertising in the Chicago Tribune, on the account.
5. Paid $430 cash for office supplies.
6. Performed services worth $11,100. Cash of $3,700 is received from customers, and the balance of $7,400 is billed to customers on account.
7. Paid $290 cash dividends.
8. Paid Chicago Tribune amount due in the transaction (4).
9. Paid employees' salaries $1,410.
10. Received $7,400 in cash from customers billed previously in the transaction (6).
Prepare a tabular analysis of the above transactions.
Dividends:
Dividends have a normal balance of debit. These are considered as a deduction to the retained earnings account, regardless of these are cash or stock dividends.
Answer and Explanation: 1
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View this answer| Reference | Cash | + | Equipment | + | Supplies | + | Accounts Receivables | = | Accounts Payable | + | Common Stock | + | Service Revenue | - | Rent Expense | - | Advertising Expense | - | Dividends | - | Salari... |
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Comparing Common & Preferred Stock
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Chapter 11 / Lesson 5
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Stock is the measure of ownership in a company, existing in common stock and preferred stock which is given priority in several cases. Explore each type of stock to identify the advantages to each.
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