How much income (or loss) did the company earn?

 
   

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Reconstructing Events from Information in the Accounting Database – Jill Jones has just established a security alarm maintenance service. She charges $20 per hour per person and is paid by check upon completion of the job. Her expenses are rather low— usually only supplies and transportation. Following are the entries to the accounting system that were made for the first seven transactions of the company.

ASSETS

=

LIABILITIES

+

OWNERS’ EQUITY

Date

Accounts

Cash

Other
Assets

Contributed
Capital

Retained
Earnings

Cash

5,000

Contributed Capital

5,000

Supplies Inventory

300

Cash

-300

Cash

4,200

Service Revenues

4,200

Utilities Expense

-450

Cash

-450

Transportation Expense

-500

Cash

-500

Insurance Expense

-500

Cash

-700

Retained Earnings

-1,300

Cash

-1,300

Ending Amounts

5,950

+300

=

+

5,000

+1,250

Required

A. For each transaction, describe the event that caused the entry to be made.

B. How much income (or loss) did the company earn?