Accounting and the Business Environme Learning Objectives 4, 2c. Total Assets $83,700 P1-46A Using the accounting equation for transaction analysis and preparing financial statements Annette Pachelo recently opened her own law office on March 1, which she operates as a corporation. The name of the new entity is Annette Pachelo, Attorney. Pachelo experienced the following events during the organizing phase of the new business and its first month of operation, March 2018. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business. Mar. 1 Sold personal investment in Amazon stock, which she had owned for several years, receiving $35,000 cash. 2 Deposited the $35,000 cash from the sale of the Amazon stock in her personal bank account. 3 Deposited $73,000 cash in a new business bank account titled Annette Pachelo, Attorney. The business issued common stock to Pachelo. 5 Paid $700 cash for ink cartridges for the printer. 7 Purchased computer for the law office, agreeing to pay the account, $5,000, within three months. 9 Received $2,800 cash from customers for services rendered. 15 Received bill from The Lawyer for magazine subscription, $400. (Use Miscellaneous Expense account.) 23 Finished court hearings on behalf of a client and submitted a bill for legal services, $10,000, on account. 28 Paid bill from The Lawyer. 30 Paid utilities, $1,200. 31 Received $3,300 cash from clients billed on March 23. 31 Cash dividends of $5,500 were paid to stockholders. NORS Disasje Requirements 1. Analyze the effects of the preceding events on the accounting equation of Annette Pachelo, Attorney. Use a format similar to Exhibit 1-6. 2. Prepare the following financial statements: a. Income statement. b. Statement of retained earnings. c. Balance sheet. d. Statement of cash flows > Problems Group B Learning Objectiv P1-47B Using the accounting equation for transaction analysis Meg McIntyre opened a public relations firm called Pop Chart on August 1, 2018. The following amounts summarize her business on August 31, 2018: Cash $12,650 48 chapter 1 CHAPTE ASSETS Cash + Accounts + Office + Land Receivable Supplies Bal. $2,600+ $2,500 + $0 +$ 16,000 LIABILITIES + EQUITY Contributed Capital + Retained Earnings Accounts + Common - Dividends + Service - Rent - Advertising Payable Stock Revenue Expense Expense $5,000 $13,600 +$2,500 + During September 2018, the business completed the following transactions: a. Received contribution of $14,000 cash from Meg McIntyre in exchange for common stock. b. Performed service for a client and received cash of $1,600. c. Paid off the beginning balance of accounts payable. d. Purchased office supplies from Office Max on account, $1,200. e. Collected cash from a customer on account, $2,300. f. Cash dividends of $1,500 were paid to stockholders. g. Consulted for a new band and billed the client for services rendered, $4,000. h. Recorded the following business expenses for the month: Paid office rent: $900. Paid advertising iste'l Bultacoat Learning Objective 4 Analyze the effects of the transactions on the accounting equation of Pop Chart using the format presented above. P1-48B Using the accounting equation for transaction analysis Cosmo Thomas started a new business, Thomas Gymnastics, and completed the following transactions during December: Cash $21,300 Dec. 1 2 5 9 10 15 Received $19,000 cash from Thomas in exchange for common stock. Received $3,800 cash from customers for services performed. Paid $300 cash for office supplies. Performed services for a customer and billed the customer for services rendered, $4,500. Received $150 invoice for utilities due in two weeks. Paid for advertising in the local paper, $350. Paid utility invoice received on Dec. 10. Collected cash in full from customer billed on Dec. 9. Paid rent for the month, $2,600. Paid $1,200 to assistant for wages. Received $1,600 cash from customers for services performed. Cash dividends of $3,000 were paid to stockholders. 20 25 28 28 30 31 Analyze the effects of the transactions on the accounting equation of Thomas Gymnastics using a format similar to Exhibit 1-6