Question

Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During June, Ming Chen (the owner) completed these transactions. a. Owner invested $60,000 cash in the company along with eguipment that had a $15,000 market value in exchange for its common stock. b. The company paid $1,500 cash for rent of office space for the month. c. The company purchased $10,000 of additional equipment on credit (payment due within 30 days). d. The company completed work for a client and immediately collected the $2,500 cash earned. e. The company completed work for a client and sent a bill for $8,000 to be received within 30 days. f. The company purchased additional equipment for $6,000 cash. g. The company paid an assistant $3,000 cash as wages for the month. h. The company collected $5,000 cash as a partial payment for the amount owed by the client in transaction e. i. The company paid $10,000 cash to settle the liability created in transaction c. j. The company paid $1,000 cash in dividends to the owner (sole shareholder).

Answer 1

Accounting Equation...

- Liabilitin + Assets Allounte Equity Dividenda common Revenue bapunsur Cash It reliable & Guipment - Allounte = IT prupble I stack + 15000 - - 75,000 a. 60,000 Ib. (1500) Bol. 58.500 1500 1500 75,000 c. I 15000 - 10,000 10,000 25.000 - 10,000 1500 75,000 2500 2500 8000 1500 75,000 25,000 = 10,000 8000 10.500 75,000 8000 25.000 - 10.000 10,500 1500 6000 7,500 3000 10500 75,000 8000 Bal. 58,500 D. 2500 dal. 61,000 E- Bl. 61,000 of L-6000) Balo 55000 IG (-3000) Bal. 52000 5000 Bol. 57000 I 6-10,000) Bl. 47000 35,000 - 10000 10500 75,000 25.000 - 10000 8000 5000 15,500 10500 75,000 25.000 - 10,000 10,000 8000 I 20,500 15.500 75000 8000 25.000 - 10000 1000 61000) 1000 + 15,500 - 20500 + 8000 + /25000 = 10,000 + 75,000 | 46,000 79000 79000

Total balance 46,000 + 8000+ 25,000 (Assets) = 10,000 + 75,000 - 1000 + 15,500 - 20,500 ( Liabilities)

79,000 = 79,000

Assets Liobilitin + Allante Equity Trein of Guipment - Allainti - pupble t Vemmon stocks Revenue I expensee + 15000 Lash a. 60,000 Ib. 161500) Bala 58,500 C. Bal. 58,500 75,000 15,000 = 75,000 1500 10,000 - 10,000 25000 = 10,000 75,000 1500 D. 2500 Bal. 61,000 75,000 1500 8000 2500 2500 8000 10,500 8000 ISOO 6000 110,000 10,500 7500 3000 10,500 25,000 = 10,000 Bol. 61,000 25.000 - 10000 75,000 f [66000) Balo 55000 8000 75,000 G (-3000) Bolo 52000 8000 25.000 - 10000 75.000 5000 Bol. 57000 8000 25.000 - 10,000 75,000 I 6-10,000) Bd. 47000 8000 25000 - 10000 75000 5 61000) bol. 37000 + 8000 + /25000 = 10,000 + 75000 - 10500 5000 15500 19500 10,000 15500 20.500 - 1000 1000 + 15,500 - 20,500