Answered: Lita Lopez started Biz Consulting, a…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 26MC: What is the impact on the accounting equation when an accounts receivable is collected? A. both...

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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 accounting equation.
2. Determine the company's net income.

Please avoid image based answers

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

Required 1 Required 2
Determine the company's net income.
Net income

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