Chapter 1, Problem 1.4APR

1.

To determine

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below:

Assets = Liabilities + Shareholders Equity

Business transaction: Business transaction is a record of any economic activity, resulting in the change in the value of the assets, the liabilities, and the Shareholder’s equities, of a business. Business transaction is also referred to as financial transaction.

To Indicate: The effect of each given transaction of Company HMR on the accounting equation.

b)

To determine

To Prepare: The financial statements for Company HMR for the month ended July 31, 2019.