Question

Part 1: ACCOUNTING  EQUATION 10 POINTS

Jan. 1, 2020        William Kelly started Kelly's Computer Service by investing $10,000.

Jan. 3                  the business borrowed $10,000 from a creditor and executed a Note payable with the principal      and interest to be due in one year

Jan. 5                the business purchased $12,000 of equipment for cash.

Jan. 8                 Kelly's rendered service to his first corporate client and earned $2,500 in cash.

Jan. 12               Kelly's incurred repair expense of $1,200 and promised to pay the repair contractor the following month

Jan. 18               Kelly's rendered service to a new client in the amount of $6,000 "on account," (the client promised to pay the following month).

Jan 31                Kelly took a withdrawal of $1,000.

Analyze the transactions for January using the accounting equation.

Answer 1

+ Total Assets + Equipment + + + Liabilities Accounts Payable + Accounts Receivable = Notes Payable + Stockholder's Equity Common Stock + Retained Earnings $10,000 + + + Cash $10,000 $10,000 (12,000) $2,500 + + $10,000 + + + 12,000 + + + + + + + + + Date Jan 1 Jan 3 Jan 5 Jan 8 Jan 12 Jan 18 Jan 31 Balance Total + + = 1,200 + + + $2,500 (1,200) 6,000 + + 6,000 = + + + + + + + + (1,000) $9,500 (1,000) $9,000 + + $6,000 $1,200 + $10,000 + + $7,300 $12,000 $27,500 $11,200 + $16,300