BTB110
Chapter 2 – Transaction Analysis
1. Tony’s Repair Shop Inc. was started on May 1. A summary of the May
transactions is as follows:
1. Issued common shares for $15,000 cash
2. Purchased equipment for $5000 cash
3. Paid $500 cash for May office rent.
4. Paid $400 cash for supplies
5. Purchased $250 of advertising in The Liberal on account.
6. Received $4100 in cash from customers for repair services provided.
7. Paid $500 cash dividend.
8. Paid part-time employee salaries, $1500.
9. Provided repair service on account to customers, $400.
10. Paid utilities bills, $140.
11. Collected $120 cash from customers for services billed in transaction (9)
12. Paid income tax of $1000.
a) Using the sheet attached to this exercise, prepare a tabular analysis of
the above transactions.
b) From an analysis of the Cash column, identify where each transaction
would be classified on the cash flow statement. Use O for Operating
activities, I for Investing activities, and F for Financing activities.
c) From the analysis of the Retained Earnings column, calculate the net
earnings or net loss for May.
Cash
Accounts
Receivable
Assets
Supplies
Equipment
Liabilities
Accounts
Payable
Shareholders’ Equity
Common
Retained
Shares
Earnings