Amanda Webb opened a home health care business under the name Home Care, Inc. During its first

Question:

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:

a. Sold common stock to Ms. Webb and other stockholders in exchange for $25,000 cash

b. Paid $15,000 cash for a parcel of land on which the business will eventually build an office building

c. Purchased supplies for $2,900 on credit

d. Paid rent for the month on office space and equipment, $600 cash

e. Performed services for clients in exchange for $3,400

f. Paid salaries for the month, $1,200

g. Purchased and used $950 of supplies

h. Paid $2,100 on account for supplies purchased in transaction c

i. Performed services for clients on credit in the amount of $770

j. Paid a $500 dividend to stockholders

Required:

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

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...