Exercise 1-8

An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below. Each increase and decrease in stockholders’ equity is explained.

Accounts Office Accounts S. Moses, S. Moses, Cash Receivable Supplies Equipment Payable Capital Drawings Revenues Expenses

1.$15,000 $15,000

2. 2,000 $5,000 $3,000

3. 750 $750

4. 4,600 $3,700 $8,300

5. 1,500 1,500

6. 2,000 $2,000

7. 650 −$650

8. 450 450

9. 4,900 4,900

10. 500 −500

Instructions

(a) Describe each transaction that occurred for the month.

(b) Determine how much stockholders’ equity increased for the month.

(c) Compute the amount of net income for the month.  

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