Question

AutoSave OFF BES Spiceland_5e_applyingexcel_ch2-1 Q Home Insert Draw Page Layout Formulas Data Review View Tell me Share Comments — — X Calibri (Body) Insert v " Α Α΄ 12 Number Σ Conditional Formatting Format as Table Cell Styles Ayu O 5 三三三回, Delete v Paste BIU GO ..... V .00 av Av V $ %) Sort & Filter Ideas Format v Find & Select Sensitivity © H11 X fx 10000 K L M N O Р Q R A B с D E F G H * View the tutorial, then complete the worksheet, replacing the question marks below with formulas as needed. 1 2 Part 1: Given information: Determine the impact of each transaction on the accounting equation: Note: all question marks in this table may not require a formula or cell reference The various transactions took place at a newly formed company: (a) Assets Liabilities 3 4 5 6 7 8 9 10 11 12 13 14 15 1 Started the company by issuing common stock 2 Paid six months of rent in advance 3 Provided services to customers on account 4 Purchased supplies on account 5 Paid employees' salaries for the current month 6 Paid dividends to stockholders 50,000 6,000 10,000 1,000 5,000 3,000 1 2 3 4 5 6 ? 2 ? ? 7 ? ? 2 ? ? 2 ? ? ? 2 Stockholders' Equity Common Stock Retained Earnings 7 2 ? ? ? ? ? ? ? ? 2 ? 7 16 17 18 (b) Does the equation balance? ? *Use a conditional statement to return a value of 'Yes' or 'No' 19

Answer 1

Solution

	Assets	=	Liabilities	+	Stockholder's equity
					Common stock	Retained earnings
1	$        50,000				$        50,000
2	$                 -
3	$        10,000					$        10,000
4	$          1,000		$        1,000
5	$        (5,000)					$        (5,000)
6	$        (3,000)					$        (3,000)
	$        53,000	=	$        1,000	+	$        50,000	$          2,000

.

Does the equation balance ?

Yes

On transaction 2 one asset account (cash) decrease and another asset account (prepaid rent) increases hence the overall effect on asset is zero.