Question
Cullumber Company entered into these transactions during May 2022, its first month of operations. 1. Stockholders invested $37,000 in the business in exchange for common
Cullumber Company entered into these transactions during May 2022, its first month of operations.
1. | Stockholders invested $37,000 in the business in exchange for common stock of the company. | |
2. | Purchased computers for office use for $33,800 from Ladd on account. | |
3. | Paid $4,500 cash for May rent on storage space. | |
4. | Performed computer services worth $15,400 on account. | |
5. | Performed computer services for Wharton Construction Company for $5,800 cash. | |
6. | Paid Western States Power Co. $9,000 cash for energy usage in May. | |
7. | Paid Ladd for the computers purchased in (2). | |
8. | Incurred advertising expense for May of $3,000 on account. | |
9. | Received $10,100 cash from customers for contracts billed in (4). |
Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to revenues or expenses in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Assets | = | Liabilities | + | Stockholders Equity | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash | + | Accounts Receivable | + | Equipment | = | Accounts Payable | + | Common Stock | + | Retained Earnings | ||||||
Revenues | - | Expenses |
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