Manning Company entered into these transactions during May 2014, its first month

Question

Manning Company entered into these transactions during May 2014, its first month of operations. Stockholders invested $34,800 in the business in exchange for common stock of the company Purchased computers for office use for $30,260 from Dell on account. Paid $5,110 cash for May rent on storage space. Performed computer services worth $18,460 on account. Performed computer services to Lawton Construction Company for $5,250 cash. Paid Southern States Power Co. $7,930 cash for energy usage in May. Paid Dell for the computers purchased in (2). Incurred advertising expense for May of $2,040 on account. Received $11,640 cash from customers for contracts billed in (4). Using the following tabular analysis, show the effect of each transaction on the accounting equation. (If a transaction causes a decrease in Assets, Liabilitie: Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. S for example.)

Explanation / Answer

ACCOUNTING EQUATION S.NO. CASH    + ACCOUNTS RECIEVABLE    + EQUIPMENT    = ACCOUNTS PAYABLE + COMMON STOCK + RETAINED EARNINGS REVENUES + EXPENSE 1 34800 34800 2 30260 30260 3 -5110 -5110 4 18460 18460 5 5250 5250 6 -7930 -7930 7 -30260 -30260 8 2040 -2040 9 11640 -11640 TOTAL 8390 6820 30260 2040 34800 23710 15080

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