Horngren's Financial & Managerial Accounting Plus MyLab Accounting with Pearson eText -- Access Card Package (6th Edition)

6th Edition

ISBN: 9780134674568

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…

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Textbook Question

Chapter 1, Problem 1.9SE

Using the accounting equation to analyze transactions

Tiny Town Kennel earns service revenue by caring for the pets of customers. Tiny Town Kennel is organized as a corporation. During the past month, Tiny Town Kennel has the following transactions:

a. Received $520 cash for service revenue earned.
b. Paid $325 cash for salaries expense.
c. Investors contributed $1,000 to the corporation in exchange for common stock.
d. Earned $640 for service revenue, bur the customer has not paid Tiny Town Kennel yet.
e. Received utility bill of $85, which will be paid next month.
f. Cash dividends of $100 were paid to stockholders.

Indicate the effects of the business transactions on the accounting equation for Tiny Town Kennel. Transaction (a) is answered as a guide.

a. Increase asset (Cash); Increase equity (Service Revenue)

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Chapter 1 Solutions

Horngren's Financial & Managerial Accounting Plus MyLab Accounting with Pearson eText -- Access Card Package (6th Edition)

Ch. 1 - Prob. 1QC Ch. 1 - Prob. 2QC Ch. 1 - Prob. 3QC Ch. 1 - Prob. 4QC Ch. 1 - Prob. 5QC Ch. 1 - Which of the following requires accounting...Ch. 1 - At the end of a recent year, Global Cleaning...Ch. 1 - Consider the overall effects on Global Cleaning...Ch. 1 - Assume that Global Cleaning Service performed...Ch. 1 - The balance sheet reports the a. financial...

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Solution Summary: The author explains the accounting equation, which creates a relation between resources and claims of resources to creditors and owners.

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