Question
Gabi Gram started The Gram Co., a new business that began operations on May 1. The Gram Co. completed the following transactions during its first month of operations.
May 1 G. Gram invested $43,500 cash in the company in exchange for its common stock. 1 The company rented a furnished office and paid $2,400 cash for May’s rent. 3 The company purchased $1,940 of office equipment on credit. 5 The company paid $780 cash for this month’s cleaning services. 8 The company provided consulting services for a client and immediately collected $5,300 cash. 12 The company provided $2,400 of consulting services for a client on credit. 15 The company paid $790 cash for an assistant’s salary for the first half of this month. 20 The company received $2,400 cash payment for the services provided on May 12. 22 The company provided $3,200 of consulting services on credit. 25 The company received $3,200 cash payment for the services provided on May 22. 26 The company paid $1,940 cash for the office equipment purchased on May 3. 27 The company purchased $80 of office equipment on credit. 28 The company paid $790 cash for an assistant’s salary for the second half of this month. 30 The company paid $300 cash for this month’s telephone bill. 30 The company paid $250 cash for this month’s utilities. 31 The company paid $1,600 cash in dividends to the owner (sole shareholder). Required information The following information applies to the questions displayed below) Gabi Gram started The Gram Co., a new business that began operations on May 1. The Gram Co. completed the following transactions during its first month of operations. 1 c. cran invested $43,500 cash in the company in exchange for its common stock 1 The company rented a furnished office and paid $2,400 cash for May's rent 3 The company purchased $1,940 of office equipnent on credit S The company paid $780 cash for this month's cleaning services 8 The company provided consulting services for a client and irmediately collected $5,300 cash 12 The company provided $2,400 of consulting services for a client on credit 15 The company paid $790 cash fr an assistant's talary for the first half of this month 20 The company received $2,400 cash payment for the services provided on May 12 22 The company provided $3,200 of consulting services on credit 25 The company received $3,200 cash payment for the services provided on May 22 26 The company paid $1,940 cash for the office equipnent purchased on May 3 27 The company purchased $80 of office equipment on credit 28 The company paid $790 cash fr an assistant's salary for the second half of this month 30 The company paid $300 cash for this month's telephone bill 30 The company paid $250 cash for this month' utilities 31 The company paid $1,600 cash in dividends to the owner (sole shareholder) Required: 1. Enter the amount of each transaction on individual items of the accounting equation. Do not determine new account balances after each transaction. (Enter the transactions in the given order. Enter reductions to account balances with a minus sign.) Office Accounts Date Cash Accounts Dividends+ $43,500 15 $43,500+$
Explanation / Answer
Solution:
Date Assets = Liabilities + Equity Cash + Accounts Receivables + Office Equipment = Accounts Payable + Common Stock - Dividend + Revenue - Expenses 1-May $43,500.00 + + = + $43,500.00 - + - 1-May -$2,400.00 + + = + - + - $2,400.00 3-May + + $1,940.00 = $1,940.00 + - + - 5-May -$780.00 + + = + - + - $780.00 8-May $5,300.00 + + = + - + $5,300.00 - 12-May + $2,400.00 + = + - + $2,400.00 - 15-May -$790.00 + + = + - + - $790.00 20-May $2,400.00 + -$2,400.00 + = + - + - 22-May + $3,200.00 + = + - + $3,200.00 - 25-May $3,200.00 + -$3,200.00 + = + - + - 26-May -$1,940.00 + + = -$1,940.00 + - + - 27-May + + $80.00 = $80.00 + - + - 28-May -$790.00 + + = + - + - $790.00 30-May -$300.00 + + = + - + - $300.00 30-May -$250.00 + + = + - + - $250.00 31-May -$1,600.00 + + = + - $1,600.00 + - $45,550.00 + $0.00 + $2,020.00 = $80.00 + $43,500.00 - $1,600.00 + $10,900.00 - $5,310.00
