TRANSACTION ANALYSIS Amanda Webb opened a home health care business under the name Home Care, Inc. During
Question:
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:
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 format below.
Assets ¼ Liabilities þ Stockholders’ Equity Contributed Capital Retained Earnings Exercise
Step by Step Answer:
Cornerstones Of Financial Accounting Current Trends Update
ISBN: 9781111527952
1st Edition
Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen