Answered: Lisa Anderson started

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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Lisa Anderson started her own consulting firm, Anderson Consulting Inc., on May 1, 2022. The following transactions occurred during the month of May. May 1 Stockholder invested $19,500 cash in the business in exchange for common stock. 2 Paid $780 for office rent for the month. 3 Purchased $650 of supplies on account. 5 Paid $195 to advertise for the month in the County News. 9 Performed services for customers for $1,820 cash. 12 Paid $260 cash dividend. 15 Performed $5,460 of services on account. 17 Paid $3,250 for employee salaries. 20 Paid for the supplies purchased on account on May 3. 23 Received a cash payment of $1,560 for services performed on account on May 15. 26 Borrowed $6,500 from the bank on a note payable. 29 Purchased office equipment for $2,600 paying $260 in cash and the balance on account. 30 Paid $244 for utilities. Show the effects of the above transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year. Include margin explanations for any changes in revenues or expenses. (If a transaction results in a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)

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