Question

The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.

1. Issued 50,000 shares of common stock in exchange for $500,000 in cash.
2. Purchased equipment at a cost of $80,000. $20,000 cash was paid and a note payable was signed for the balance owed.
3. Purchased inventory on account at a cost of $152,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $220,000. The cost of the goods sold was $132,000.
5. Paid $6,750 in rent on the warehouse building for the month of March.
6. Paid $7,300 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018.
7. Paid $132,000 on account for the merchandise purchased in 3.
8. Collected $99,000 from customers on account.
9. Recorded depreciation expense of $2,000 for the month on the equipment.

Required:
Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.)
  

Assets	=	Liabilities	+	Paid-In Capital	+	Retained Earnings
1.
2.
3.
4.
5.
6.
7.
8.
9.

Answer 1

Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.)
  

	Assets	=	Liabilities	+	Paid-In Capital	+	Retained Earnings
1.	500000				500000
2	60000		60000
3	152000		152000
4	88000						88000
5	-6750						-6750
6	NA		NA		NA		NA
7	-132000		-132000
8	NA		NA		NA		NA
9	-2000						-2000