The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $195,000 (assume Marchetti uses a perpetual inventory system); (2) paid $50,000 in salaries to employees for work performed during the month; (3) sold inventory on account to customers for $250,000 that had a cost of $140,000; (4) collected $230,000 in cash from credit customers; and (5) paid on account to suppliers of inventory $175,000. Analyze each transaction and show the effect of each on the 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) S (2) (3) (5) Assets 195,000 (50,000) = 11 || (175,000) = Liabilities 0 + 0 + 0 + + Paid-in capital + Retained Earnings +
The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $195,000 (assume Marchetti uses a perpetual inventory system); (2) paid $50,000 in salaries to employees for work performed during the month; (3) sold inventory on account to customers for $250,000 that had a cost of $140,000; (4) collected $230,000 in cash from credit customers; and (5) paid on account to suppliers of inventory $175,000. Analyze each transaction and show the effect of each on the 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) S (2) (3) (5) Assets 195,000 (50,000) = 11 || (175,000) = Liabilities 0 + 0 + 0 + + Paid-in capital + Retained Earnings +
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for
$195,000 (assume Marchetti uses a perpetual inventory system); (2) paid $50,000 in salaries to employees for work performed during
the month; (3) sold inventory on account to customers for $250,000 that had a cost of $140,000; (4) collected $230,000 in cash from
credit customers; and (5) paid on account to suppliers of inventory $175,000.
Analyze each transaction and show the effect of each on the 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) S
(2)
(3)
(5)
Assets
195,000
(50,000) =
I
(175,000) =
Liabilities
0 +
0 +
0 +
+
Paid-in capital
+ Retained Earnings
+
+
+
+
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