Reference no: EM132748252

Problem - Transactions - Amy Austin established an insurance agency on March 1 of the current year and completed the following transactions during March:

a. Opened a business bank account with a deposit of $50,000 in exchange for common stock.

b. Purchased supplies on account, $4,000.

c. Paid creditors on account, $2,300.

d. Received cash from fees earned on insurance commissions, $13,800.

e. Paid rent on office and equipment for the month, $5,000.

f. Paid automobile expenses for month, $1,150, and miscellaneous expenses, $300.

g. Paid office salaries, $2,500.

h. Determined that the cost of supplies on hand was $2,700; therefore, the cost of supplies used was $1,300.

i. Billed insurance companies for sales commissions earned, $12,500.

j. Paid dividends, $3,900.

Instructions -

1. Indicate the effect of each transaction and the balances after each transaction.

2. Determine the net income for March.