George Littlechild started a new kitchen and bath design business called Littlechild Enterprises. The following activities occurred during its first month of operations, March 2020: a. Littlechild invested $160,000 cash and office equipment valued at $20,000 in the business. b. Purchased a small building for $600,000 to be used as an office. Paid $100,000 in cash and signed a note payable promising to pay the balance over several years. c. Purchased $3,000 of office supplies for cash. d. Purchased $72,000 of office equipment on credit. e. Littlechild made reservations at a hotel hosting a kitchen and bath design conference in August 2020. He will send a $1,000 deposit on July 1, 2020. f. Completed a project on credit and billed the client $5,200 for the work. g. Paid a local online newspaper $3,500 for an announcement that the office had opened. h. Completed a project for a client and collected $4,000 cash. i. Made a $4,000 payment on the equipment purchased in (d). j. Received $2,500 from the client described in (f). k. Paid $7,000 cash for the office secretary's wages. I. Littlechild withdrew $3,600 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' effects on the elements of the equation. For each change in equity, select whether the change was caused by an investment, a revenue, an expense, ora withdrawal. Determine the final total for each item and verify that the equation is in balance. (Enter all amounts as positive values. If the transaction/event does not affect equity or do not require a journal entry, select "No Affect on Equity" in the 'Explanation of equity transection' field.) Assets
George Littlechild started a new kitchen and bath design business called Littlechild Enterprises. The following activities occurred during its first month of operations, March 2020: a. Littlechild invested $160,000 cash and office equipment valued at $20,000 in the business. b. Purchased a small building for $600,000 to be used as an office. Paid $100,000 in cash and signed a note payable promising to pay the balance over several years. c. Purchased $3,000 of office supplies for cash. d. Purchased $72,000 of office equipment on credit. e. Littlechild made reservations at a hotel hosting a kitchen and bath design conference in August 2020. He will send a $1,000 deposit on July 1, 2020. f. Completed a project on credit and billed the client $5,200 for the work. g. Paid a local online newspaper $3,500 for an announcement that the office had opened. h. Completed a project for a client and collected $4,000 cash. i. Made a $4,000 payment on the equipment purchased in (d). j. Received $2,500 from the client described in (f). k. Paid $7,000 cash for the office secretary's wages. I. Littlechild withdrew $3,600 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' effects on the elements of the equation. For each change in equity, select whether the change was caused by an investment, a revenue, an expense, ora withdrawal. Determine the final total for each item and verify that the equation is in balance. (Enter all amounts as positive values. If the transaction/event does not affect equity or do not require a journal entry, select "No Affect on Equity" in the 'Explanation of equity transection' field.) Assets
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 1BD
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Transcribed Image Text:George Littlechild started a new kitchen and bath design business called Littlechild Enterprises. The following activities occurred
during its first month of operations, March 2020:
a. Littlechild invested $160,000 cash and office equipment valued at $20,000 in the business.
b. Purchased a small building for $600,000 to be used as an office. Paid $100,000 in cash and signed a note payable promising to
pay the balance over several years.
c. Purchased $3,000 of office supplies for cash.
d. Purchased $72,000 of office equipment on credit.
e. Littlechild made reservations at a hotel hosting a kitchen and bath design conference in August 2020. He will send a $1,000
deposit on July 1, 2020.
f. Completed a project on credit and billed the client $5,200 for the work.
g. Paid a local online newspaper $3,500 for an announcement that the office had opened.
h. Completed a project for a client and collected $4,000 cash.
i. Made a $4,000 payment on the equipment purchased in (d).
j. Received $2,500 from the client described in (f).
k. Paid $7,000 cash for the office secretary's wages.
I. Littlechild withdrew $3,600 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' effects on the elements of the equation.
For each change in equity, select 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. If the
transaction/event does not affect equity or do not require a journal entry, select "No Affect on Equity" in the 'Explanation of equity
transaction' field.)
Assets
Equity
Liabilities
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