Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 1, Problem 13E
Identifying effects of transactions using the
P1
Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During June, Ming Chen (the owner) completed these transactions.
a. Owner invested $60,000 cash in the company along with equipment that had a $15,000 market value.
b. The company paid $1,500 cash for rent of office space for the month.
c. The company purchased $10,000 of additional equipment on credit (payment due within 30 days).
d. The company completed work for a client and immediately collected the $2,500 cash earned.
e. The company completed work for a client and sent a bill for $8,000 to be received within 30 days.
f. The company purchased additional equipment for $6,000 cash.
g. The company paid an assistant $3,000 cash as wages for the month.
h. The company collected $5,000 cash as a partial payment for the amount owed by the client in transaction e.
i. The company paid $10,000 cash to settle the liability created in transaction c.
j. Owner withdrew $1,000 cash from the company for personal use.
Required
Create the following table similar to the one in Exhibit 1.9.
Check Ending balances: Cash, $46,000; Expenses. $4,500
Then use additions and subtractions to show the dollar effects of the transactions on individual items of the accounting equation. Show new balances after each transaction.
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ANALYSIS OF TRANSACTIONS
Jona passed the bar exam in April and immediately set up her own law practice. During the first month of operation, she completed the following transactions:
Began the law practice by placing P2,000,000 in a bank account establish for the business
Purchase a Law Library for P290,000 cash
Purchase office supplies for P30,000 on credit
Accepted P50,000 in cash for completing a contract
Billed clients for P39,500 for service rendered during the month
Paid P20,000 of the amount owed for office supplies
Received P30,000 in cash from clients who had been previously billed
Paid rent expense for the month in the amount of P10,000
Withdrew P50,000 for personal use
Paid utilities for P15,000
Office supplies that were consumed for the period is 90%.
REQUIREMENTS:
Analysis of Transaction (increase/decrease)
Statement of Financial Position
Statement of Comprehensive Income
Chapter 1 Solutions
Principles of Financial Accounting.
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