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Mobile App Chapter 1: 47PGB (page 47)
Meg McIntyre opened a public relations firm called Pop Chart on August 1, 2018. The following amounts summarize her business on August 31, 2018During September 2018, the business completed the following transactions: a. Received contribution of \(14,000 cash from Meg McIntyre in exchange for common stock. b. Performed service for a client and received cash of \)1,600. c. Paid off the beginning balance of accounts payable. d. Purchased office supplies from OfficeMax on account, \(1,200. e. Collected cash from a customer on account, \)2,300. f. Cash dividends of \(1,500 were paid to stockholders. g. Consulted for a new band and billed the client for services rendered, \)4,000. h. Recorded the following business expenses for the month: Paid office rent: \(900. Paid advertising: \)450. Analyze the effects of the transactions on the accounting equation of Pop Chart using the format presented above.:
Short Answer
Effect of the transaction on the accounting equation is shown as follows:
Assets | = | Liabilities | + | Equity | |||||||||||||||
Contributed Capital | + | Retained Earnings | |||||||||||||||||
Cash | + | Accounts Receivable | + | Office Supplies | + | Land | Accounts Payable | Common Stock | - | Dividends | + | Service Revenue | - | Rent Expense | - | Advertising Expense | |||
Bal. | $2,600 | + | $2,500 | + | $0 | + | $16,000 | = | $5,000 | + | $13,600 | + | $2,500 | ||||||
a | +14,000 | +14,000 | |||||||||||||||||
Bal. | $16,600 | + | $2,500 | + | $0 | + | $16,000 | = | $5,000 | + | $27,600 | + | $2,500 | ||||||
b | +1,600 | +,1600 | |||||||||||||||||
Bal. | $18,200 | + | $2,500 | + | $0 | + | $16,000 | = | $5,000 | + | $27,600 | + | $4,100 | ||||||
c | -5000 | -5000 | |||||||||||||||||
Bal. | $13,200 | + | $2,500 | + | $0 | + | $16,000 | = | $0 | + | $27,600 | + | $4,100 | ||||||
d | +1,200 | +1,200 | |||||||||||||||||
Bal. | $13,200 | + | $2,500 | + | $1,200 | + | $16,000 | = | $1,200 | + | $27,600 | + | $4,100 | ||||||
e | +2,300 | -2,300 | |||||||||||||||||
Bal. | $15,500 | + | $200 | + | $1,200 | + | $16,000 | = | $1,200 | + | $27,600 | + | $4,100 | ||||||
f | -1,500 | -1,500 | |||||||||||||||||
Bal. | $14,000 | + | $200 | + | $1,200 | + | $16,000 | = | $1,200 | + | $27,600 | - | $1,500 | + | $4,100 | ||||
g | +4,000 | +4,000 | |||||||||||||||||
Bal. | $14,000 | + | $4,200 | + | $1,200 | + | $16,000 | = | $1,200 | + | $27,600 | - | $1,500 | + | $8,100 | ||||
h | -1350 | -900 | -450 | ||||||||||||||||
Bal. | $12,650 | + | $4,200 | + | $1,200 | + | $16,000 | = | $1,200 | + | $27,600 | - | $1,500 | + | $8,100 | - | $900 | - | $450 |
$34,050 | $34,050 |
Step by step solution
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