Chapter 2, Problem 40E

Exercise 2-40 Transaction Analysis

Amanda Webb opened a home health care business under the name Home Care Inc. During its first month of operations. the business had the following transactions:

1. Issued common stock to Ms. Webb and other stockholders in exchange for $30,000 cash.
2. Paid $18,500 cash for a parcel of land on which the business will eventually build an office building.
3. Purchased supplies for $2350 on credit.
4. Used the supplies purchased in Transaction c.
5. Paid rent for the month on office space and equipment. $800 cash.
6. Performed services for clients in exchange for $3,910 cash.
7. Paid salaries for the month. $1,100.
8. Paid $650 cash for advertising in the current month.
9. Paid $1,900 on account for supplies purchased in Transaction c.
10. Performed services for clients on credit in the amount of 51,050.
11. Paid a $600 dividend to stockholders

Required:

Prepare an analysis of the effects of these transactions on the accounting equation of the business. Use the format below.