Question

Question 7 (32 points] Based on the following transactions, complete the table shown below. a. A shareholder paid Calaho Inc. $40,000 cash for share capital in the business b. Calavo in purchased $2,000 of equipment on credit. 6. $300 of commissions were earned and collected today by Callaho Inc d. Caliaho Inc purchased supplies by paying $500 cash e Furniture was rented by a customer for $800 cash 1. Callaho ing performed consulting services for a customer and received $6,500 9 $1,000 of commissions were cared and collected today by Callaha Inc h. Callaho Inc. returned 5200 of defective suppries today that were orgnaly purchased for cash 1. Callaho Inc. used $500 cash and $2.250 credit to purchase now equipment worth $2,750. 1. Callaho Inc. paid dividends of $2,300 to the shareholders a) To complete the table shown below, identify the headings (account names for each column by clicking on the appropriate call and making a selection. Use additions (+ sign) and subtractions sign) to show the transactions effects on the elements of the equation Indicate next to each change in equily on the explanation column) whether it was caused by the issuance of share capital investment), a revenue, an expense or payment of dividends. Identity revenues and expenses by name. If a transaction does not affect equity, no explanation is required. Calculate the total balance for each column (not of sign is required for totals) Equity Explanation Share Capital Retained Earnings ea [Sao Pe 2633228 b) Prove the accounting equation by calculating total assets and comparing it to the total of abilities plus equity. Please make sure your final answers) are accurate to the nearest whole number - Totallis and equity Accounting equation

Answer 1

1	Assets							Liabilities		Equity
	Trans.	Cash	+	Supplies	+	Equipment	=	Accounts Payable	+	Share Capital	+	Retained Earnings	Explantion
	(a)	$40,000								$40,000			Investment
	(b)					$2,000		$2,000
	(c)	$800										$800	Revenue
	(d)	-$500		$500
	(e)	-$800										-$800	Expense
	(f)	$6,500										$6,500	Revenue
	(g)	1600										$1,600	Revenue
	(h)	$200		-$200
	(i)	-$500				$2,750		$2,250
	(j)	-$2,300										-$2,300	Payment of dividend
	Total	$45,000	+	$300	+	$4,750	=	$4,250	+	$40,000	+	$5,800
2
		Total Assets	=	Total liabilties and equity
		$50,050	=	$50,050