Chapter 1, Problem P1.40APGA

Using the accounting equation for transaction analysis

Meg McKinney opened a public relations firm called Solid Gold on August 1,2018. The following amounts summarize her business on August 31,2018:

Learning Objective 4

Cash $13,600

During September 2018, the business completed the following transactions:

a. Meg McKinney contributed $17,000 cash in exchange for capital.
b. Performed service for a client and received cash of $800.
c. Paid off the beginning balance of accounts payable.
d. Purchased office supplies from OfficeMax on account, $1,200.
e. Collected cash from a customer on account, $2,000.
f. McKinney withdrew $1,600.
g. Consulted for a new band and billed the client for services rendered, $4,500.
h. Recorded the following business expenses for the month:

Paid office rent: $1,000.
Paid advertising: $500.

Analyze the effects of the transactions on the accounting equation of Solid Gold using the format presented in Exhibit 1-5.