Question

George Littlechid started a new kitchen and bath design business called Littlechild Enterprises. The folowing activities occurred during its first month of operations, March 2014: a Lillechild invested $185.000 cash and office equipment valued at $25,000 in the business b. Purchased a small building for $650,000 to be used as an office. Paid $125,000 in cash and signed a nale payable promising to pay the balance aver several years. c. Purchased $3,500 of office supplies for cash d. Purchased $77 000 of office equipment on credit e. George Littlechid made reservations at a hotel hosting a kitchen and bath design conference in August 2014. He will send a $1.500 deposit on July 1, 2014. Completed a project on credit and billed the client $5,700 for the work. g. Paid a local newspaper S4,000 for an announcement that the office had opened h. Completed a project for a client and collected $4,500 cash, I. Made a $4,500 payment on the equipment purchased in id) j. Received $2,750 from the client described in k. Paid $9.000 cash for the office secretary's wages. I. Lilleschild withdrew $4,100 cash from the company bank account to pay personal living expenses. Required: 1. & 2. Complete the following table. Use additions and subtractions to show the transactions' offects on the elements of the equation. For each change in equity, state whether the change was caused by an Investment, a revenue, an expense, or a withdrawal. Determine the final total for each item and verify that the equation is in balance. (Enter all amounts as positive values.) Assets Liabilities + Accounts Receivable Cash Office Supplies Office Equipment Equity George Littlechild, Capital + Accounts Payable Building Notes Payable + Explanation of Equity Transaction TTTTTTT

Answer 1

Assets Liabilities Accounts Receivable + Office Office Supplies + || Equipment + 25,000 Accounts payable Notes payable Equity George Littlechild, Capital Explanation + 210,000 Invesmtent By George + Building + + (a) + 6) Cash 185,000 125,000 3,500 650,000 525,000 (d) 77,000 77,000 (f) + 5,700 5,700 Service Revenue 4,000 Advertisement Expenses 4,500 Service Revenue (h) (i) () (k) + - + 4,500 4,000 4,500 4,500 2,750 8,000 4,100 43,150 - 2,750 8,000 Wages Expenes 4,100 Withdrawl by George 204,100 Bal. 2,950 $ 3,500 102,000 650,000 = 72,500 525,000 801,600 801,600 Note: No Entry is required for Transaction e.