Calculate the net income or net loss for mars

Assignment Help Accounting Basics

Reference no: EM131912691

Problem

On Mars 1st, Ahmed established ABC Travel Agency. The following transactions were completed during the month of March:

Invested $35,000 cash to start the agency.

Purchased equipment for $3,700 cash.

Incurred $1700 of advertising costs in the Gulf News, on account.

Paid $1200 cash for Mars office rent.

Paid employees' salaries $3200.

Paid $1200 cash for office supplies.

Performed services worth $25,000: $12,000 cash is received from customers, and the balance of $13,000 is billed to customers on account.

Withdrew $1200 cash for personal use.

Paid Gulf News $1200 of the amount due in transaction (3).

Received $7,000 in cash from customers who have previously been billed in transaction (7).

Requirement

Show the effect of the above transactions on the accounting equation using the following column headings:

Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Owner's Capital, Owner's Drawings, Revenues, and Expenses.

(b) From an analysis of the owner's equity columns, compute the net income or net loss for Mars.

Reference no: EM131912691

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