Question

Lita Lopez started Biz Consulting, a new business, and completed the following transactions during its first year of operations. a. Lita Lopez invested $61,000 cash and office equipment valued at $37,000 in the company in exchange for its common stock. b. The company purchased an office suite for $47,000 cash. c. The company purchased office equipment for $5,600 cash. d. The company purchased $3,400 of office supplies and $1,200 of office equipment on credit. e. The company paid a local newspaper $810 cash for printing an announcement of the office's opening. f. The company completed a financial plan for a client and billed that client $4,500 for the service. g. The company designed a financial plan for another client and immediately collected a $8,800 cash fee. h. The company paid $1,100 cash in dividends to the owner (sole shareholder). i. The company received $3,500 cash as partial payment from the client described in transaction f. j. The company made a partial payment of $600 cash on the equipment purchased in transaction d. k. The company paid $1,800 cash for the office secretary's wages for this period. Required: 1. Enter the amount of each transaction on individual items of the accounting equation. 2. Determine the company's net income. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the company's net income. Net income < Required 1 Required 2 >

Answer 1

1) Accounting equation

	Assets	=	Liabilities	+	Stockholder's equity
1.	61000				98000
	37000
2	47000
	-47000
3.	5600
	-5600
4	3400		4600
	1200
5	-810				-810
6	4500				4500
7	8800				8800
8	-1100				-1100
9	3500
	-3500
10	-600		-600
11	-1800				-1800

2) Net income = 13300-810-1800 = 10690