Answered

IDNLearn.com provides a collaborative platform for sharing and gaining knowledge. Discover in-depth and trustworthy answers from our extensive network of knowledgeable professionals.

Lita Lopez started Biz Consulting, a new business, and completed the following transactions during its first year of operations. Lita Lopez invested $70,000 cash and equipment valued at $10,000 in the company in exchange for its common stock. The company purchased a building for $40,000 cash. The company purchased equipment for $15,000 cash. The company purchased $1,200 of supplies and $1,700 of equipment on credit. The company paid $500 cash for advertising expenses. The company completed a financial plan for a client and billed that client $2,800 for the service. The company designed a financial plan for another client and immediately collected a $4,000 cash fee. The company paid $3,275 cash in dividends to the owner (sole shareholder). The company received $1,800 cash as partial payment from the client described in transaction f. The company made a partial payment of $700 cash on the equipment purchased in transaction d. The company paid $1,800 cash for the secretary's wages for this period. Required:

Sagot :

Anthougoidn

1. The effects of each transaction on the individual items of the accounting equation are as follows:

Cash    $70,000 + (40,000) + (15,000) + (500) + 4,000 + (3,275) + 1,800 + (700) + (1,800) = $14,525

Accounts Receivable $2,800 - 1,800 = $1,000

Office Supplies $1,200

Equipment $10,000 + 15,000 + 1,700 = $26,700

Office Suites $40,000

Accounts Payable $1,200 + $1,700 + (700) = $2,200

Capital–L. Lopez $70,000 + 10,000 = $80,000

Dividends $3,275

Revenues $2,800 + 4,000 = $6,800

Advertising Expenses $500

Wages Expense $1,800

Total $2,300

2. The company's Net income is $4,500.

Data and Calculations:

Net income = Revenue - Expenses

= $2,300 ($6,800 - $2,300).

Learn more about the accounting equation at https://brainly.com/question/28246336

#SPJ1

Question Completion:

1. Use additions and subtractions within the table to show the dollar effects of each transaction on individual items of the accounting equation.

2. Determine the company’s net income.

Thank you for joining our conversation. Don't hesitate to return anytime to find answers to your questions. Let's continue sharing knowledge and experiences! Thank you for choosing IDNLearn.com. We’re dedicated to providing clear answers, so visit us again for more solutions.