H Choudhary joined be Acrobat Reader DC Fenetre Aide Cours accounting.p. X 65 13 sur 58) 95,6% 89/25/07 3:18 PM Page 65 Mid-Chapter Sum MID-CHAPTER SUMMARY PROBLEM Shelly Herzog opens a research service near a college campus. She names the corporation Herzog Researchers, Inc. During the first month of operations, July 20X3, the business engages in the following transactions 1. Herzog Researchers, Inc., issues is common stock to Shelly Herzog, who invests b. The company purchases on account office supplies costing $350 c. Herzog Researchers pays cash of $20,000 to acquire a lot next to the campus. The com- pany intends to use the land as a building site for a business office d. Herzog Researchers performs research for clients and receives cash of 51.900 e. Herzog Researchers pays $100 on the account payable it created in transaction b. 1. Herzog pays $2,000 of personal funds for a vacation & Herzog Researchers pays cash expenses for office rent (5400) and utilities ($100). h. The business sells a small parcel of the land for its cost of $5,000 1. The business declares and pays a cash dividend of S1,200. I Required 1. Analyze the preceding transactions in terms of their ellects on the accounting equation of Herzog Researchers, Inc. Use Exhibit 2-1, Panel B as a guide. 2. Prepare the income statement, statement of retained earnings, and balance sheet of Herzog Researchers, Inc., after recording the transactions. Draw arrows linking the statements Solutions H Choudhary joined be Acrobat Reader DC Fenetre Aide Cours accounting.p. X 65 13 sur 58) 95,6% 89/25/07 3:18 PM Page 65 Mid-Chapter Sum MID-CHAPTER SUMMARY PROBLEM Shelly Herzog opens a research service near a college campus. She names the corporation Herzog Researchers, Inc. During the first month of operations, July 20X3, the business engages in the following transactions 1. Herzog Researchers, Inc., issues is common stock to Shelly Herzog, who invests b. The company purchases on account office supplies costing $350 c. Herzog Researchers pays cash of $20,000 to acquire a lot next to the campus. The com- pany intends to use the land as a building site for a business office d. Herzog Researchers performs research for clients and receives cash of 51.900 e. Herzog Researchers pays $100 on the account payable it created in transaction b. 1. Herzog pays $2,000 of personal funds for a vacation & Herzog Researchers pays cash expenses for office rent (5400) and utilities ($100). h. The business sells a small parcel of the land for its cost of $5,000 1. The business declares and pays a cash dividend of S1,200. I Required 1. Analyze the preceding transactions in terms of their ellects on the accounting equation of Herzog Researchers, Inc. Use Exhibit 2-1, Panel B as a guide. 2. Prepare the income statement, statement of retained earnings, and balance sheet of Herzog Researchers, Inc., after recording the transactions. Draw arrows linking the statements Solutions