During 2007, its first year of operations as a delivery service, Cheng Corp. entered Determine effect of
Question:
During 2007, its first year of operations as a delivery service, Cheng Corp. entered Determine effect of into the following transactions. transactions on basic accounting equation. Issued shares of common stock to investors in exchange for $110,000 in cash. (SO 1)
Borrowed $45,000 by issuing bonds.
Purchased delivery trucks for $60,000 cash.
Received $16,000 from customers for services provided.
Purchased supplies for $4,200 on account.
Paid rent of $5,600.
Performed services on account for $8,000.
Paid salaries of $28,000.
Paid a dividend of $11,000 to shareholders.
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.
reaiOeESayeeNlSe, e Liabilities + Stockholders’ Equity Desh oat Property, Plant, _ Accounts Bonds Common Retained PP and Equipment Payable Payable Stock Earnings Assets Accounts Casket Receivable
Step by Step Answer:
Financial Accounting Tools For Business Decision Making
ISBN: 9780471730514
4th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso