Question

Cullumber Co. opened on July 1, 2020. On July 31 , the statement of financial position showed Cash ¥5,900, Accounts Receivable ¥1,900, Supplies ¥600, Equipment ¥6,300, Accounts Payable ¥4,000, Share Capital-Ordinary ¥2,900, and Retained Earning of ¥7,800 (amounts in thousands). During August, the following transactions occurred. 1. Collected ¥1,600 of accounts receivable. 2. Paid ¥2,800 cash on accounts payable. 3. Recognized revenue of ¥7,800, of which ¥2,900 is collected in cash and the balance is due in September. 4. Purchased additional equipment for ¥2,300, paying ¥300 in cash and the balance on account. 5. Paid salaries ¥2,100, rent for August ¥1,000, and advertising expenses ¥300. 6. Declared and paid ¥700 dividend. 7. Received ¥1,900 from Standard Bank-money borrowed on a note payable. 8. Incurred utility expenses for month on account ¥350. Prepare a tabular analysis of the August transactions beginning with July 31 balances.

Answer 1

To analyze Cullumber Co's transactions for August, begin with the July 31 balances and adjust for each transaction, reflecting increases and decreases in assets, liabilities, and equity to provide a new financial position at the end of August.

Step-by-step explanation:

To prepare a tabular analysis of the August transactions for Cullumber Co, we start with the balances provided at July 31 and account for each transaction that occurred during August.

1. Collected ¥1,600 of accounts receivable.
2. Paid ¥2,800 cash on accounts payable.
3. Recognized revenue of ¥7,800, with ¥2,900 collected in cash and the balance due in September.
4. Purchased additional equipment for ¥2,300, paying ¥300 in cash and the balance on account.
5. Paid salaries ¥2,100, rent for August ¥1,000, and advertising expenses ¥300.
6. Declared and paid ¥700 dividend.
7. Received ¥1,900 from Standard Bank - money borrowed on a note payable.
8. Incurred utility expenses for the month on account ¥350.

When each transaction is analyzed, increases and decreases in assets, liabilities, and equity accounts must be accounted for to determine the new balances at the end of August. Tabulating these will provide the statement of financial position as of August 31.