During January 2020, the first month of operations, a consulting firm had the following transactions:1. Issued common stock to owners in exchange for $20,000 cash.2. Purchased $5,000 of equipment, paying $1,000 cash and signing a promissory note for $4,000.3. Received $9,000 in cash for consulting services performed in January.4. Purchased $1,500 of supplies on account; all of the supplies were used in January.5. Provided consulting services on account in the amount of $ 16,000.6. Paid $750 on account.7. Paid $3,000 to employees for work perfonned during January.8. Received a bill for utilities for January of $3,400; the bill remains unpaid.What is the amount to be reported as total liabilities on the balance sheet at the end of January? a. $4, 150 b. $4,7500 c. $8,500 d. $8, 150 e. None of the above.

During January 2020, the first month of operations, a consulting firm had the following transactions:1. Issued common stock to owners in exchange for $20,000 cash.2. Purchased $5,000 of equipment, paying $1,000 cash and signing a promissory note for $4,000.3. Received $9,000 in cash for consulting services performed in January.4. Purchased $1,500 of supplies on account; all of the supplies were used in January.5. Provided consulting services on account in the amount of $ 16,000.6. Paid $750 on account.7. Paid $3,000 to employees for work perfonned during January.8. Received a bill for utilities for January of $3,400; the bill remains unpaid.What is the amount to be reported as total liabilities on the balance sheet at the end of January? a. $4, 150 b. $4,7500 c. $8,500 d. $8, 150 e. None of the above.

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Description: During January 2020, the first month of operations, a consulting firm had thefollowing transactions:1. Issued common stock to owners in exchange for $20,000cash.2. Purchased $5,000 of equipment, paying $1,000 cash and signing apromissory note for $4

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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Question

During January 2020, the first month of operations, a consulting firm had the
following transactions:1. Issued common stock to owners in exchange for $20,000
cash.2. Purchased $5,000 of equipment, paying $1,000 cash and signing a
promissory note for $4,000.3. Received $9,000 in cash for consulting services
performed in January.4. Purchased $1,500 of supplies on account; all of the supplies
were used in January.5. Provided consulting services on account in the amount of $
16,000.6. Paid $750 on account.7. Paid $3,000 to employees for work perfonned
during January.8. Received a bill for utilities for January of $3,400; the bill remains
unpaid.What is the amount to be reported as total liabilities on the balance sheet at
the end of January? a. $4, 150 b. $4,7500 c. $8,500 d. $8, 150 e. None of the
above.

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