Analyzing and Reporting Financial Statement Effects of Transactions
M.E. Carter launched Carter Company, a professional services firm on March 1. The firm will prepare financial statements at each month-end. In March (its first month), Carter executed the following transactions. Enter the transactions, a through g, into the financial statement effects template below.
a. Carter (owner) invested in the company $300,000 cash and $60,000 in property and equipment. The company issued common stock to Carter.
b. The company paid $9,600 cash for rent of office furnishings and facilities for March.
c. The company performed services for clients and immediately received $12,000 cash earned.
d. The company performed services for clients and sent a bill for $72,000 with payment due within 60 days.
e. The company compensated an office employee with $14,400 cash as salary for March.
f. The company received $30,000 cash as partial payment on the amount owed from clients in transaction d.
g. The company paid $2,805 cash in dividends to Carter (owner).
Use negative signs with answers, if appropriate.