P1-54 Using the accounting equation for transaction analysis, preparing financial statements, and calculating return on assets (ROA)Daniels Consulting began operations and completed the following transactions during December 2016:Dec. 2Daniels contributed $20,000 cash in exchange for capital.2Paid monthly office rent, $2,000.3Paid cash for a computer, $3,600. This equipment is expected to remain in service for five years.4Purchased office furniture on account, $3,000. The furniture should last for five years.5Purchased office supplies on account, $800.9Performed consulting service for a client on account, $2,500.12Paid utilities expenses, $150.18Performed service for a client and received cash of $2,100.21Received $2,400 in advance for client service to be performed in the future. (This increases the Unearned Revenue account, which is a liability. This account will be explained in more detail in Chapter 2.)21Hired an administrative assistant to be paid $2,055 on the 20th day of each month. The secretary begins work immediately.26Paid $200 on account.28Collected $400 on account.30Daniels withdrew $1,000.Requirements1. Analyze the effects of Daniels Consultings transactions on the accounting equation. Use the format of Exhibit 1-5, and include these headings: Cash; Accounts Receivable; Office Supplies; Equipment; Furniture; Accounts Payable; Unearned Revenue; Daniels, Capital; Daniels, Withdrawals; Service Revenue; Rent Expense; and Utilities Expense.2. Prepare the income statement of Daniels Consulting for the month ended December 31, 2016.3. Prepare the statement of owners equity for the month ended December 31, 2016.4. Prepare the balance sheet as of December 31, 2016.5. Calculate the return on assets for Daniels Consulting for December, 2016. CHAPTER 1Accounting and the Business Environment 51CRITICAL THINKING Decision Case 1-1Lets examine a case using Gregs Tunes and Sals Silly Songs. It is now the end of the first year of operations, and both owners want to know how well each business came out at the end of the year. Neither business kept complete accounting records, and neither owner made any withdrawals. The businesses throw together the following data at year-end:$ 23,0008,00035,00022,000$ 10,0006,00044,0009,000Total asset Owner contributionTotal revenuesTotal expensesGregs Tunes:Sals Silly Songs:Total liabilitiesOwner contributionTotal expensesNet incomeTo gain information for evaluating the businesses, the owners ask you several questions. For each answer, you must show your work to convince the owners that you know what you are talking about.