Question

Exercise 1-13 Identifying effects of transactions using the accounting equation LO P1 

Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During Ju Ming Chen (the owner) completed these transactions.

 a. Owner invested $62.000 cash in the company along with equipment that had a $23,000 market value in exchange for its comm stock

 b. The company paid $1.900 cash for rent of office space for the month

 c. The company purchased $15,000 of additional equipment on credit (payment due within 30 days).

 d. The company completed work for a client and immediately collected the $1,800 cash earned.

 e. The company completed work for a client and sent a bill for $8,100 to be received within 30 days 

 f. The company purchased additional equipment for $6,800 cash.

 g. The company paid an assistant $3.800 cash as wages for the month

 h. The company collected $4100 cash as a partial payment for the amount owed by the client in transaction e 

 i. The company paid $15.000 cash to settle the liability created in transaction 

 j. The company paid $1.000 cash in dividends to the owner (sole shareholder).

Required: Enter the impact of each transaction on individual items of the accounting equation. 

Answer 1

+ Equity Assets Accounts Receivable Liabilities Accounts Payable Cash + Equipment Dividends + Revenues Expenses Common Stock 85000 a. + 23000 62000 -1900 60100 1900 1900 Bal. + 85000 C. 23000 15000 38000 15000 15000 85000 1900 60100 1800 61900 - - 38000 15000 85000 1900 Bal. d. Bal. e. Bal. f. Bal. 1800 1800 8100 9900 8100 8100 15000 85000 - 1900 I + 38000 6800 44800 8100 + 15000 85000 9900 - 1900 3800 5700 Bal. + + 44800 15000 + 85000 9900 61900 -6800 55100 -3800 51300 4100 55400 - 15000 40400 -1000 39400 8100 -4100 Bal. + 4000 44800 85000 9900 5700 15000 -15000 + + + + + + + + Bal. 4000 44800 85000 9900 5700 + + 1000 1000 Bal. 4000 + 44800 + 85000 - 9900 5700