Analyzing Transactions

Luis Madero, after working for several years with a large public accounting firm, decided to open his own accounting service. The business is operated as a corporation under the name Madero Accounting Services. The following captions and amounts summarize Madero's balance sheet at July 31, 2019.

Assets

=

Liabilities

+

Equity

Cash

+

Accounts Receivable

+

Supplies

=

Accounts Payable

+

Notes Payable

+

Common Stock

+

Retained Earnings

8,000

15,900

4,100

2,500

4,000

12,000

9,500

The following events occurred during August 2019.

Issued common stock to Ms. Garriz in exchange for $15,000 cash.

Paid $850 for first month's rent on office space.

Purchased supplies of $2,250 on credit.

Borrowed $8,000 from the bank.

Paid $1,080 on account for supplies purchased earlier on credit.

Paid secretary's salary for August of $2,150.

Performed accounting services for clients who paid cash upon completion of the service in the total amount of $4,700.

Used $3,180 of the supplies on hand.

Performed accounting services for clients on credit in the total amount of $1,920.

Purchased $500 in supplies for cash.

Collected $1,290 cash from clients for whom services were performed on credit.

Paid $1,000 dividend to stockholders.

Required:

1. Record the effects of the transactions listed above on the accounting equation. The totals at July 31, 2019 have already been entered.

If an amount box does not require an entry, leave it blank. Enter decreases in account values as negative numbers.

Assets

=

Liabilities

+

Equity

Cash

+

Acct. Rec.

+

Supplies

=

Acct. Pay.

+

Notes Pay.

+

Common Stock

+

Ret. Earn.

8,000

15,900

4,100

2,500

4,000

12,000

9,500

a.

b.

c.

d.

e.

f.

g.

h.

i.

j.

k.

l.

+

+

=

+

+

+