Question

The following transactions occur for the Wolfpack Shoe Company during the month of June: Provide services to customers for $21,000 and receive cash. Purchase office supplies on account for $11,000. Pay $5,200 in salaries to employees for work performed during the month. Transaction Assets = Liabilities + Stockholders’ Equity (a) $21,000 $0 $21,000 (b) $11,000 $11,000 $0

(c) $0

Answer 1

Singleton Bank records a loan to Hank's Auto Supply as an asset for interest income; deposits and reserves at First National increase. The net profit from stock transactions is the selling price minus purchase price and transaction fees.

Step-by-step explanation:

Understanding Bank Transactions and Stock Net Profit Calculations

When a bank such as Singleton Bank issues a loan to a business like Hank's Auto Supply, it records the loan on the balance sheet as an asset. This is because the loan will generate interest income for the bank. Meanwhile, when Hank's Auto Supply deposits the loan in First National, both the bank's deposits and reserves increase. Singleton Bank is then required to keep a portion of these deposits as required reserves, but it can loan out the remainder.

Regarding the stock transactions, to calculate the net profit, you subtract the original purchase price from the selling price and then factor in the transaction fees. For example, if you purchased 1,000 shares of Nike at $24.50 and sold them at $39.75, while the stock company charges $9.99 per transaction, your net profit is calculated by finding the total revenue, subtracting the initial cost, and then subtracting the transactions fees from this result.