Problem 1-1a

Barone’s Repair Shop was started on May 1 by Nancy Barone. A summary of May transactions is presented below.

1. Invested $10,000 cash to start the repair shop.

2. Purchased equipment for $5,000 cash.

3. Paid $400 cash for May office rent.

4. Paid $500 cash for supplies.

5. Incurred $250 of advertising costs in the Beacon News on account.

6. Received $5,100 in cash from customers for repair service.

7. Withdrew $1,000 cash for personal use.

8. Paid part-time employee salaries $2,000.

9. Paid utility bills $140.

10. Provided repair service on account to customers $750.

11. Collected cash of $120 for services billed in transaction (10).

Instructions

(a) Prepare a tabular analysis of the transactions, using the following column headings: Cash, Accounts Receivable, Supplies, Equipment,Accounts Payable,N. Barone, Capital;N. Barone, Drawings; Revenues, and Expenses.

(b) From an analysis of the owner’s equity columns, compute the net income or net loss for May