Luis Madero, after working for several years with a large public accounting firm, decided to open his own accounting service. The business is operated as a corporation under the name Madero Accounting Services. The following captions and amounts summarize Madero's balance sheet at July 31. Assets Liabilities Equity Accounts Accounts Notes Common Retained Cash Receivable Supplies Payable Payable Stock Earnings 8,000 15,900 +] 4,100 2,500 4,000 12,000 9,500 The following events occurred during August. a. Issued common stock to Ms. Garriz in exchange for $15,000 cash. b. Paid $850 for first month's rent on office space. c. Purchased supplies of $2,250 on credit. d. Borrowed $8,000 from the bank. e. Paid $1,080 on account for supplies purchased earlier on credit. f. Paid secretary's salary for August of $2,150. g. Performed accounting services for clients who paid cash upon completion of the service in the total amount of $4,700. h. Used $3,180 of the supplies on hand. I. Performed accounting services for clients on credit in the total amount of $1,920. J. Purchased $500 in supplies for cash. k. Collected $1,290 cash from clients for whom services were performed on credit. I. Paid $1,000 dividend to stockholders. Required: 1. Record the effects of the transactions listed above on the accounting equation. The totals at July 31 have already been entered. If an amount box does not require an entry, leave it blank. Enter decreases in account values as negative numbers. Assets Liabilities Equity
Luis Madero, after working for several years with a large public accounting firm, decided to open his own accounting service. The business is operated as a corporation under the name Madero Accounting Services. The following captions and amounts summarize Madero's balance sheet at July 31. Assets Liabilities Equity Accounts Accounts Notes Common Retained Cash Receivable Supplies Payable Payable Stock Earnings 8,000 15,900 +] 4,100 2,500 4,000 12,000 9,500 The following events occurred during August. a. Issued common stock to Ms. Garriz in exchange for $15,000 cash. b. Paid $850 for first month's rent on office space. c. Purchased supplies of $2,250 on credit. d. Borrowed $8,000 from the bank. e. Paid $1,080 on account for supplies purchased earlier on credit. f. Paid secretary's salary for August of $2,150. g. Performed accounting services for clients who paid cash upon completion of the service in the total amount of $4,700. h. Used $3,180 of the supplies on hand. I. Performed accounting services for clients on credit in the total amount of $1,920. J. Purchased $500 in supplies for cash. k. Collected $1,290 cash from clients for whom services were performed on credit. I. Paid $1,000 dividend to stockholders. Required: 1. Record the effects of the transactions listed above on the accounting equation. The totals at July 31 have already been entered. If an amount box does not require an entry, leave it blank. Enter decreases in account values as negative numbers. Assets Liabilities Equity
Chapter1: Financial Statements And Business Decisions
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The accounting equation is considered as a mathematical representation of the transaction. It indicates that total assets are equal to, the total sum of shareholder fund and liability.
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