Assets = Liabilities + Equity
+$42,000 = $60,000 + (-$18,000)
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Easy
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-22 Transaction Analysis
217. On May 1, Fiona Nash formed a computer consulting business. In order to start the business, she invested $10,000 in equipment. Enter the appropriate amounts into the accounting equation format.
Assets = Liabilities + Equity
$10,000 = 0 + $10,000
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Easy
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-22 Transaction Analysis
218. Blu Lightning Co. spent $6,000 in cash for a computer. Enter the appropriate amounts into the accounting equation format.
Assets = Liabilities + Equity
6,000 = 0 + 0
-6,000
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Easy
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-22 Transaction Analysis
219. Blu Lightning Co. bought supplies and testing equipment for $3,000 on credit. Enter the appropriate amounts into the accounting equation format
Assets = Liabilities + Equity+$3,000 = +$3,000 + 0
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Easy
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-22 Transaction Analysis
220. Blu Lightning Co. performed testing services for the Cheetah Co. Blu Lightning Co. billed Cheetah Co. $5,000. Enter the appropriate amounts into the accounting equation format.
Assets = Liabilities + Equity + $5,000 = 0 + +$5,000
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Easy
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-22 Transaction Analysis
221. Blu Lightning Co. paid its employees $2,000 in cash for two weeks' wages. Enter the appropriate amounts into the accounting equation format.
Assets = Liabilities + Equity - $2,000 = 0 + -$2,000
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Easy
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-22 Transaction Analysis
222. Blu Lightning Co. received $5,000 for a previously recorded account receivable from the Cheetah Co. Enter the appropriate amounts into the accounting equation format.
Assets = Liabilities + Equity + $5,000 = 0 + 0 - $5,000 = 0 + 0
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-22 Transaction Analysis
223. If, on January 1, Terry Chervinski Company paid $2,000 of its accounts payable in cash, what would be the effect of this transaction on assets, on liabilities, and on equity?
Assets would decrease $2,000, liabilities would decrease $2,000, and equity would not change. Assets = Liabilities + Equity - $2,000 = -$2,000 + $0
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-22 Transaction Analysis
224. Dallas Parsons, CPA, began an accounting practice and completed these transactions during September 2015:
Sept 1
Invested $15,000 of his personal savings into a bank account opened in the name of the accounting practice.
Sept 2
Purchased office equipment for $12,500, paying $800 cash and agreeing to pay the balance in one year.
Sept 3
Rented office space and paid cash for two months in advance, $11,200.
Sept 4
Completed accounting work for a client and immediately collected $1,500 in cash for the work done.
Sept 8
Purchased office supplies for cash, $150.
Sept 15
Completed accounting services for a client on credit, $2,300.
Sept 20
Received $2,300 from the above client for the work completed on September 15.
Sept 30
Paid utilities expense for month of $1,300.
Sept 30
Paid the office secretary's salary, $400.
Sept 30
Paid $100 for repairs to the photocopier.
Show the effects of the above transactions on the balance sheet items of Dallas Parsons, CA. Use the following format for your answers. Increase = I Decrease = D No effect = N