Holden Graham started The Graham Co., a new business that began operations on Ma
ID: 2420003 • Letter: H
Question
Holden Graham started The Graham Co., a new business that began operations on May 1. The Graham Co. completed the following transactions during its first month of operations.
May 1
H. Graham 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 $1,890 of office equipment on credit.
5
The company paid $740 cash for this month’s cleaning services.
8
The company provided consulting services for a client and immediately collected $5,700 cash.
12
The company provided $2,700 of consulting services for a client on credit.
15
The company paid $750 cash for an assistant’s salary for the first half of this month.
20
The company received $2,700 cash payment for the services provided on May 12.
22
The company provided $3,100 of consulting services on credit.
25
The company received $3,100 cash payment for the services provided on May 22.
26
The company paid $1,890 cash for the office equipment purchased on May 3.
27
The company purchased $90 of advertising in this month’s (May) local paper on credit; cash payment is due June 1.
28
The company paid $750 cash for an assistant’s salary for the second half of this month.
30
The company paid $350 cash for this month’s telephone bill.
30
The company paid $280 cash for this month’s utilities.
31
The company paid $1,500 cash in dividends to the owner (sole shareholder).
Required:
Enter the amount of each transaction on individual items of the accounting equation. (Enter the transactions in the given order. Enter reductions to account balances with a minus sign.)
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Holden Graham started The Graham Co., a new business that began operations on May 1. The Graham Co. completed the following transactions during its first month of operations.
Explanation / Answer
Answer:
Assets Liabilities Owner's equity
Cash + A/R + Office Eqip = A/P + Owner's Capital - Withdraw + Revenue - Exp
1 + 43,500 + 43,500
1 -2400 -2400
3 +1890 +1890
5 -740 -740
8 +5700 +5700
12 + 2700 + 2700
15 -750 -750
20 +2700 -2700
22 + 3100 + 3100
25 +3100 - 3100
26 -1890 -1890
27 +90 -90
28 -750 -750
30 -350 -350
30 -280 -280
31 -1500 -1500
Bal +46340 0 +1890 +90 +43500 -1500 +11500 -5360
Balance $ 48,230 = $48,230
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