Question

Wildhorse Co. entered into these transactions during May 2017, its first month of operations.

1.		Stockholders invested $33,000 in the business in exchange for common stock of the company
2.		Purchased computers for office use for $26,900 from Ladd on account.
3.		Paid $3,100 cash for May rent on storage space.
4.		Performed computer services worth $15,300 on account.
5.		Performed computer services for Wharton Construction Company for $3,500 cash.
6.		Paid Western States Power Co. $8,700 cash for energy usage in May.
7.		Paid Ladd for the computers purchased in (2).
8.		Incurred advertising expense for May of $3,400 on account.
9.		Received $11,100 cash from customers for contracts billed in (4).

Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders’ Equity in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 3-3 for example.)

Answer 1

	Assets					=	Liabilities			+	Stockholders' Equity			Income Statement
	Cash	+	Accounts Receivable	+	Computer	=	Accounts Payable	+	Other liabilities	+	Common Stock	+	Retained Earnings	Revenues	-	Expenses	Changes to Stockholders' Equity
1)	$33,000										$33,000						Due to issue of common stock, the stockholders equity account will increase.
2)					$26,900		$26,900
3)	($3,100)															($3,100)
4)			$15,300											$15,300
5)	$3,500													$3,500
6)	($8,700)															($8,700)
7)	($26,900)						($26,900)
8)									$3,400							($3,400)
9)	$11,100		($11,100)
	$8,900		$4,200		$26,900		$0		$3,400		$33,000		$0	$18,800		($15,200)