Thomas

started a new business,

Thomas

Gymnastics, and completed the following transactions during

December:

Analyze the effects of the transactions on the accounting equation of

Thomas

Gymnastics. Use the following accounts: Cash, Accounts Receivable, Office Supplies, Accounts Payable, Common Stock, Dividends, Service Revenue, Rent Expense, Utilities Expense, Wages Expense, and Advertising Expense.

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Part 1

Analyze the events chronologically, one transaction at a time, beginning with the transaction on the 1st. For each transaction that follows the transaction on the 1st, calculate the balance in each account after analyzing its effect on the accounting equation. (Complete only the necessary answer boxes for your transaction lines. [Do not enter any zeros for your transaction lines.] Carry down all balances to the "Bal." line, including zero balance accounts, entering a "0" for any zero balances. Enter a decrease in an account with a minus sign or parentheses. Abbreviations used: A/P = Accounts Payable; A/R = Accounts Receivable; Adv. = Advertising; Com. = Common; Contr. = Contributed; Div. =

Dec. 1

Received $19,000 cash from Conner in exchange for common stock.

Dec. 2

Received $3,800 cash from customers for services performed.

Dec. 5

Paid $200 cash for office supplies.

Dec. 9

Performed services for a customer and billed the customer for services rendered, $4,500.

Dec. 10

Received $200 invoice for utilities due in two weeks.

Dec. 15

Paid for advertising in the local paper, $250.

Dec. 20

Paid utility invoice received on December 10.

Dec. 25

Collected cash in full from customer billed on December 9.

Dec. 28

Paid rent for the month, $1,600.

Dec. 28

Paid $1,450 to assistant for wages.

Dec. 30

Received $1,400 cash from customers for services performed.

Dec. 31

Cash dividends of $3,500 were paid to stockholders.

Dividends;

Exp. = Expense; Liab. = Liabilities; Off. = Office; Sal. = Salaries; Serv. Rev. = Service Revenue; Sup. = Supplies; Util. = Utility.)

Assets

=

Liab.

+

Equity

Contr.

Capital

Retained Earnings

Cash

+

A/R

+

Off.

=

A/P

+

Com.

-

Div.

+

Serv.

-

Rent

-

Util.

-

Sal.

-

Adv.

Sup.

Stock

Rev.

Exp.

Exp.

Exp.

Exp.

12/1

7300

+

3800

+

200

=

4500

+

1900

-

3500

+

4500

-

1600

-

200

-

1450

-

250