Ming Chen started a business and had the following transactions in June. Create the following table similar to Exhibit 1.9 and use additions and subtractions to show the dollar effects of the transactions on individual items of the accounting equation. Show new balances after each transaction.

a. Owner invested $60,000 cash in the company along with $15,000 of equipment in exchange for its common stock.

b. The company paid $1,500 cash for rent of office space for the month.

c. The company purchased $10,000 of additional equipment on credit (payment due within 30 days).

d. The company completed work for a client and immediately collected $2,500 cash.

e. The company completed work for a client and sent a bill for $8,000 to be received within 30 days.

f. The company purchased additional equipment for $6,000 cash.

g. The company paid an assistant $3,000 cash as wages for the month.

h. The company collected $5,000 cash as a partial payment for the amount owed by the client in transaction e.

i. The company paid $10,000 cash to settle the liability created in transaction c.

j. The company paid $1,000 cash in dividends to the owner (sole shareholder).

Transcribed Image Text:

Assets Liabilities Equity Cash + Accounts + Equipment Accounts + Common Dividends + Revenues Expenses Receivable Payable Stock