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The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 24,000 shares of common stock in exchange for $240,000 in cash. 2. Purchased equipment at a cost of $28,00O. $7,000 cash was paid and a notes payable to the seller was signed for the balance owed, 3. Purchased inventory on account at a cost of $74,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $90,00O. The cost of the goods sold was $54,000. 5. Paid $3,500 in rent on the warehouse building for the month of March. 6. Paid $5,500 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021. 7. Paid $54,000 on account for the merchandise purchased in 3. 8. Collected $40,500 from customers on account. 9. Recorded depreciation expense of $700 for the month on the equipment.

The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 24,000 shares of common stock in exchange for $240,000 in cash. 2. Purchased equipment at a cost of $28,00O. $7,000 cash was paid and a notes payable to the seller was signed for the balance owed, 3. Purchased inventory on account at a cost of $74,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $90,00O. The cost of the goods sold was $54,000. 5. Paid $3,500 in rent on the warehouse building for the month of March. 6. Paid $5,500 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021. 7. Paid $54,000 on account for the merchandise purchased in 3. 8. Collected $40,500 from customers on account. 9. Recorded depreciation expense of $700 for the month on the equipment.

FINANCIAL ACCOUNTING
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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The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 24,000 shares of common stock in exchange for $240,000 in cash. 2. Purchased equipment at a cost of $28,000. $7,000 cash was paid and a notes payable to the seller was signed for the balance owed. 3. Purchased inventory on account at a cost of $74,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $90,000. The cost of the goods sold was $54,000. 5. Paid $3,500 in rent on the warehouse building for the month of March. 6. Paid $5,500 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021. 7. Paid $54,000 on account for the merchandise purchased in 3. 8. Collected $40,500 from customers on account. 9. Recorded depreciation expense of $700 for the month on the equipment. Required: Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.) Assets Liabilities Paid-In Capital Retained Earnings + 1. 240,000 240,000 2. 28,000 21,000 7,000
Transcribed Image Text:The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 24,000 shares of common stock in exchange for $240,000 in cash. 2. Purchased equipment at a cost of $28,000. $7,000 cash was paid and a notes payable to the seller was signed for the balance owed. 3. Purchased inventory on account at a cost of $74,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $90,000. The cost of the goods sold was $54,000. 5. Paid $3,500 in rent on the warehouse building for the month of March. 6. Paid $5,500 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021. 7. Paid $54,000 on account for the merchandise purchased in 3. 8. Collected $40,500 from customers on account. 9. Recorded depreciation expense of $700 for the month on the equipment. Required: Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.) Assets Liabilities Paid-In Capital Retained Earnings + 1. 240,000 240,000 2. 28,000 21,000 7,000
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