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Anonymous

Dec 26, 2024

Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During June,

Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During June, the following transactions were completed:

  1. Ming Chen, the owner, invested $66,000 in cash and contributed equipment with a market value of $15,000 in exchange for common stock in the company.

  2. The company paid $1,800 in cash for the monthly rent of office space.

  3. The company purchased additional equipment valued at $15,000 on credit, with payment due within 30 days.

  4. The company completed work for a client and received $2,500 in cash immediately.

  5. The company completed work for another client and issued a bill for $8,700, to be collected within 30 days.

  6. The company purchased additional equipment for $6,400 in cash.

  7. The company paid wages of $3,900 in cash to an assistant for the month.

  8. The company collected $4,800 in cash as a partial payment from the client mentioned in transaction 5.

  9. The company paid $15,000 in cash to settle the liability incurred from the purchase of equipment in transaction 3.

  10. The company paid $1,500 in cash as dividends to the owner, who is the sole shareholder.

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1 Answers

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Anonymous

Oct 25, 2024

ASSETS=LIABILITIES+EQUITYa  97,000  =                  +  97,000 b  (2,100)=                  +  (2,100)c  10,000  =        10,000  + d  1,600  =                  +  1,600 e  9,000  =                  +  9,000 f             -  =                   +g  (3,000)=                   +  (3,000)h            =                   + i  (10,000)=         (10,000)  +j  (1,100)=                   +  (1,100)TOTAL $101,400  =            -  +  101,400    Explanation:Accounting equation is the foundation of dual entry bookkeepping  system. It is also known as the balance sheet equation that shows the relationship between ASSSET, LIABILITIES AND EQUITY. Total assets must be equal to total liabilities + Equity due to the dual entry system otherwise, it is an indication of discrepancy in during the recording.
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