Lita Lopez started Biz Consulting, a new business, and completed the following transactions during its first year of operations. Lita Lopez invested $67,000 cash and equipment valued at $35,000 in the company in exchange for its common stock. The company purchased a building for $45,000 cash. The company purchased equipment for $5,500 cash. The company purchased $3,800 of supplies and $1,500 of equipment on credit. The company paid $880 cash for advertising expenses. The company completed a financial plan for a client and billed that client $4,500 for the service. The company designed a financial plan for another client and immediately collected a $8,300 cash fee. The company paid $1,500 cash in dividends to the owner (sole shareholder). The company received $3,500 cash as partial payment from the client described in transaction f. The company made a partial payment of $750 cash on the equipment purchased in transaction d. The company paid $1,700 cash for the secretary’s wages for this period. Required: 1. Enter the amount of each transaction on individual items of the accounting equation. 2. Determine the company's net income.
Lita Lopez started Biz Consulting, a new business, and completed the following transactions during its first year of operations. Lita Lopez invested $67,000 cash and equipment valued at $35,000 in the company in exchange for its common stock. The company purchased a building for $45,000 cash. The company purchased equipment for $5,500 cash. The company purchased $3,800 of supplies and $1,500 of equipment on credit. The company paid $880 cash for advertising expenses. The company completed a financial plan for a client and billed that client $4,500 for the service. The company designed a financial plan for another client and immediately collected a $8,300 cash fee. The company paid $1,500 cash in dividends to the owner (sole shareholder). The company received $3,500 cash as partial payment from the client described in transaction f. The company made a partial payment of $750 cash on the equipment purchased in transaction d. The company paid $1,700 cash for the secretary’s wages for this period. Required: 1. Enter the amount of each transaction on individual items of the accounting equation. 2. Determine the company's net income.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter3: Processing Accounting Information
Section: Chapter Questions
Problem 3.3E: The Effect of Transactions on the Accounting Equation For each of the following transactions,...
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Question
Lita Lopez started Biz Consulting, a new business, and completed the following transactions during its first year of operations.
Lita Lopez invested $67,000 cash and equipment valued at $35,000 in the company in exchange for its
common stock.
The company purchased a building for $45,000 cash.
The company purchased equipment for $5,500 cash.
The company purchased $3,800 of supplies and $1,500 of equipment on credit.
The company paid $880 cash for advertising expenses.
The company completed a financial plan for a client and billed that client $4,500 for the service.
The company designed a financial plan for another client and immediately collected a $8,300 cash fee.
The company paid $1,500 cash in dividends to the owner (sole shareholder).
The company received $3,500 cash as partial payment from the client described in transaction f.
The company made a partial payment of $750 cash on the equipment purchased in transaction d.
The company paid $1,700 cash for the secretary’s wages for this period.
Required:
1. Enter the amount of each transaction on individual items of the
2. Determine the company's net income.
Please avoid image based answers
Transcribed Image Text:Enter the amount of each transaction on individual items of the accounting equation. (Reductions in account balances should be indicated with a minus sign.)
a.
b.
Balance after a and b
C.
Balance after c
d.
Required 1 Required 2
Balance after d
le.
Balance after e
f.
Balance after f
g.
Balance after g
h.
Balance after h
i.
Balance after i
Balance after j
k.
Balance after k
Cash
$ 67.000 +
45,000 +
112,000 +
www.
$
+
+
112,000 +
+
112,000 +
+
112,000 +
+
112,000 +
+
112,000 +
+
112,000 +
+
112,000 +
+
112,000 +
+
112,000 +
Accounts
Receivable
$
+
+
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
Assets
Supplies + Equipment + Building
$ 35,000 +
$
+
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
0 +
+
0 +
+
0 +
$
+
35,000 +
+
35,000 +
+
35,000 +
+
35,000 +
+
35,000 +
+
35,000 +
+
35,000+
+
35,000 +
+
35,000 +
+
35,000 +
$
=
0 =
0 =
0 =
0 =
=
0 =
0 =
0 =
=
0 =
=
0 =
0 =
Liabilities
Accounts
Payable
$
+
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
Common
Stock
$ 102,000
102,000 -
102,000
102,000
102,000
102,000
102,000 -
102,000
102,000
102,000 -
$ 102,000
Equity
Dividends +
$
+
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
+
0 +
Revenues
$
0
0-
0
0
0
0
-
0
-
0
-
-
0 -
-
-
-
-
0 -
Expenses
$
0
0
0
0
0
0
0
0
0
0
Transcribed Image Text:Required 1 Required 2
Determine the company's net income.
Net income
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