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Chapter 1: Q28E (page 40)

Using the accounting equation to analyze business transactions The analysis of the first eight transactions of Advanced Accounting Service follows. Describe each transaction ASSETS EQUITY Common 鈭� Stock Contributed Capital Dividends + Retained Earnings 鈭� 鈭� Salaries Expense Service Revenue + + + + + + + + + + + + + + + + + + + + + + + + + + + 1 2 Bal. 3 Bal. 4 Bal. 5 Bal. 6 Bal. 7 Bal. 8 Bal. Accounts Receivable Cash +13,400 \(13,400 \)13,400 +410 \(13,810 \)13,810 \(13,810 \)13,810 +31,000 \(31,000 \)31,000 +190 \(31,190 鈥�410 \)30,780 鈥�8,000 \(22,780 +790 \)23,570 鈥�1,500 \(22,070 +13,400 \)13,400 \(13,400 \)13,400 鈥�8,000 \(5,400 \)5,400 \(5,400 +31,000 \)31,000 \(31,000 \)31,000 \(31,000 \)31,000 \(31,000 \)31,000 +3,800 \(3,800 \)3,800 鈥�190 \(3,610 \)3,610 \(3,610 \)3,610 \(3,610 +3,800 \)3,800 \(3,800 \)3,800 \(3,800 \)3,800 +790 \(4,590 \)4,590 鈭�1,500 $1,500 LIABILITIES Accounts Payable

Short Answer

Expert verified

(1) Stockholder contribution

(2)Earning of Service Revenue on Account

(3) Purchase of equipment on account

(4) Collection on Account (Accounts Receivable)

(5) Purchase of equipment for cash

(6) Payment on Account (Accounts Payable)

(7) Earning of Service Revenue for Cash

(8) Payment of Salaries Expenses with Cash

Step by step solution

01

Explanation on Transaction Analysis

Trasaction analysis is the process in wffwct of the transaction on various accounts is analyzed.

02

Explanation on Accounting Equation

As per the accounting equation, affect of financial transaction of the business should be equal in both sides of the equation.

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Most popular questions from this chapter

Match the accounting terminology to the definitions. 7. Cost principle a. oversees the creation and governance of accounting standards in the United States 8. GAAP b. requires an organization to be a separate economic unit 9. Faithful representation c. oversees U.S. financial markets 10. SEC d. states that acquired assets and services should be recorded at their actual cost 11. FASB e. creates International Financial Reporting Standards 12. Monetary unit assumption f. the main U.S. accounting rule book 13. Economic entity assumption g. assumes that an entity will remain in operation for the foreseeable future 14. Going concern assumption h. assumes that items on the financial statements are recorded in a monetary unit 15. IASB i. requires information to be complete, neutral, and free from material error

Financial statements in the United States are reported in U.S. dollars. What assumption supports this statement?

Using the accounting equation Roland鈥檚 Overhead Doors reports the following financial information: Assets $ 45,800 Liabilities 17,220 Common Stock 27,460 Dividends 6,500 Revenues 8,850 Expenses ? Requirements 1. Use the accounting equation to solve for the missing information. 2. Did Roland鈥檚 Overhead Doors report net income or net loss?

Preparing the balance sheet Requirements 1. Prepare the balance sheet for Wilson Towing Service as of June 30, 2018. 2. What does the balance sheet report?

Canyon Canoe Company is a service-based company that rents canoes for use on local lakes and rivers. Amber and Zack Wilson graduated from college about 10 years ago. They both worked for one of the 鈥淏ig Four鈥� accounting firms and became CPAs. Because they both love the outdoors, they decided to begin a new business that will combine their love of outdoor activities with their business knowledge. Amber and Zack decide that they will create a new corporation, Canyon Canoe Company, or CCC for short. The business began operations on November 1, 2018. Nov. 1 Received \(16,000 cash to begin the company and issued common stock to Amber and Zack. 2 Signed a lease for a building and paid \)1,200 for the first month鈥檚 rent. 3 Purchased canoes for \(4,800 on account. 4 Purchased office supplies on account, \)750. 7 Earned \(1,400 cash for rental of canoes. 13 Paid \)1,500 cash for wages. 15 Paid \(50 dividends to stockholders. 16 Received a bill for \)150 for utilities. (Use separate payable account.) 20 Received a bill for \(175 for cell phone expenses. (Use separate payable account.) 22 Rented canoes to Early Start Daycare on account, \)3,000. 26 Paid \(1,000 on account related to the November 3, 2018, purchase. 28 Received \)750 from Early Start Daycare for canoe rental on November 22, 2018. 30 Paid $100 dividends to stockholders. Requirements 4. Prepare the balance sheet as of November 30, 2018.

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