Downtown Company entered into these transactions during May 2007. 1. Purchased computers for office use for $35,000 from Dell on account. 2. Paid $4,000 cash for May rent on storage space.

Exercises ] 3 7 Received $12,000 cash from customers for contracts billed in April.

. Provided computer services to Brieske Construction Company for $5,000 cash.

. Paid Southern States Power Co. $11,000 cash for energy usage in May.

. Stockholders invested an additional $30,000 in the business in exchange for common stock of the company. 7. Paid Dell for the computers purchased in (1). 8. Incurred advertising expense for May of $1,000 on account.

Instructions Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders’ Equity in the right-hand margin.

Use Illustration 3-2 (page 107) as a model.

Assets = Liabilities + Stockholders’ Equity Cash 4p Accounts’ Office _ Accounts Common Retained Receivable Equipment Payable Stock Earnings