The following transactions occurred during March 2024 for the Right Corporation. The company operates a wholesale warehouse. 1. Issued 32,000 shares of no-par common stock in exchange for $320,000 in cash. 2. Purchased equipment at a cost of $44,000. Cash of $11,000 was paid and a note payable to the seller was signed for the balance owed. 3. Purchased inventory on account at a cost of $98,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $130,000. The cost of the goods sold was $78,000. 5. Paid $4,250 in rent on the warehouse building for the month of March. 6. Paid $5,950 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2024. 7. Paid $78,000 on account for the inventory purchased in transaction 3. 8. Collected $58,500 from customers on account. 9. Recorded depreciation expense of $1,100 for the month on the equipment. Required: Analyze each transaction and show the effect of each on the expanded accounting equation for a corporation. Note: Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following transactions occurred during March 2024 for the Right Corporation. The company operates a
wholesale warehouse.
1. Issued 32,000 shares of no-par common stock in exchange for $320,000 in cash.
2. Purchased equipment at a cost of $44,000. Cash of $11,000 was paid and a note payable to the seller was
signed for the balance owed.
3. Purchased inventory on account at a cost of $98,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $130,000. The cost of the goods sold was $78,000.
5. Paid $4,250 in rent on the warehouse building for the month of March.
6. Paid $5,950 to an insurance company for fire and liability insurance for a one-year period beginning April 1,
2024.
7. Paid $78,000 on account for the inventory purchased in transaction 3.
8. Collected $58,500 from customers on account.
9. Recorded depreciation expense of $1,100 for the month on the equipment.
Required:
Analyze each transaction and show the effect of each on the expanded accounting equation for a corporation.
Note: Amounts to be deducted should be indicated by a minus sign. Enter the net change on the
accounting equation.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Assets
320,000
44,000 =
98,000 =
130,000 =
78,000 =
4,250 =
5,950 =
78,000 =
=
Liabilities
98,000
+
+
+
+
+
+
+
+
+
+
Paid-In Capital
320,000
11,000
+
+
+
+
+
+
+
+
Retained Earnings
33,000
Transcribed Image Text:The following transactions occurred during March 2024 for the Right Corporation. The company operates a wholesale warehouse. 1. Issued 32,000 shares of no-par common stock in exchange for $320,000 in cash. 2. Purchased equipment at a cost of $44,000. Cash of $11,000 was paid and a note payable to the seller was signed for the balance owed. 3. Purchased inventory on account at a cost of $98,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $130,000. The cost of the goods sold was $78,000. 5. Paid $4,250 in rent on the warehouse building for the month of March. 6. Paid $5,950 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2024. 7. Paid $78,000 on account for the inventory purchased in transaction 3. 8. Collected $58,500 from customers on account. 9. Recorded depreciation expense of $1,100 for the month on the equipment. Required: Analyze each transaction and show the effect of each on the expanded accounting equation for a corporation. Note: Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation. 1. 2. 3. 4. 5. 6. 7. 8. 9. Assets 320,000 44,000 = 98,000 = 130,000 = 78,000 = 4,250 = 5,950 = 78,000 = = Liabilities 98,000 + + + + + + + + + + Paid-In Capital 320,000 11,000 + + + + + + + + Retained Earnings 33,000
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