The following events occurred for Parker Company. a. Paid $5,000 cash for land b. Performed consulting services

Question:

The following events occurred for Parker Company.
a. Paid $5,000 cash for land
b. Performed consulting services for a client in exchange for $1,200 cash
c. Performed consulting services for a client on account, $700
d. Stockholders invested $12,000 cash in the business
e. Purchased office supplies on account, $300
f. Collected $500 from client in transaction c
g. Paid $250 on account for supplies purchased in transaction e
h. Paid $200 cash for the current month’s rent
i. Paid a $1,000 cash to stockholders

Required:
1. Analyze the effect of each transaction on the accounting equation. For example, for transaction a, the answer is Increase assets (land) $5,000 and decrease assets (cash) $5,000.
2. For e, what accounting principle did you use to determine the amount to be recorded for supplies?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...