Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 50,000 shares of common

image text in transcribed

The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 50,000 shares of common stock in exchange for $500,000 in cash. 2. Purchased equipment at a cost of $80,000 $20,000 cash was paid and a notes payable to the seller was signed for the balance owed. 3. Purchased inventory on account at a cost of $152,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $220,000. The cost of the goods sold was $132,000. 5. Paid $6,750 in rent on the warehouse building for the month of March. 6. Paid $7,300 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021. 7. Paid $132,000 on account for the merchandise purchased in 3. 8. Collected $99,000 from customers on account. 9. Recorded depreciation expense of $2,000 for the month on the equipment Required: Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.) Liabilities + + Retained Earnings Assets 500,000 Paid In Capital 500,000 1. 2. 3. 4. 5. 6. 7. 8. 9

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sound Investing, Chapter 22 - Management Discussion And Analysis

Authors: Kate Mooney

1st Edition

007171944X, 9780071719445

More Books

Students also viewed these Accounting questions