3) Soo Lin, the sole stockholder, begai an Internet Consult ng practice organize

Question

3) Soo Lin, the sole stockholder, begai an Internet Consult ng practice organized as a cor oration and completed these transactions during April of the current year: Apri1 Invested $100,000 of her personal savings into a checking account opene name of the business. in the 2 Rented office space ard paid $1,200 cash for the month of September Purchased office equipment for $30,000, paying $8,000 cash and agreein to pay the balance in one year. 4 Purchased office supplies for $750 cash Completed work for a client and immediat collected S2,700 cash for e services 15 Completed $3,600 services for a client on credit. 201 Received $3,600 from client for the work completed on September 15 30 Paid the office secretary's monthly salary, S3,000 cash. 301 The corporation paid a $2.000 dividend. Show the effects of the above transactions on the accounting equation of Soo Lin, Cons altant. Use t following format for your answers. The first item is shown as an example. Increase = 1 Decrease D No effec = N -sets! Liabilities Equity Date Example: April 1

Explanation / Answer

2) prepaid revenue will increase and cash will decrease so asset side effect nil.

3) cash will decrease by 8000 however office equipment will increase by 30,000 so net effect on assets will beincrease and liabilities will also increase by 22000(on credit)

4) office supplies will decrease the asset(outflow of cash) and decrease the equity(expense)

8) cash will go up so asset will increase and we will earn some income on it so equity will increase.

15) accounts recivable will go up so assets will increase and we will earn some income on it so equity will increase.

20) Accounts recivable will go down and cash will go up so net effect on assets side would be nil

30) salary paid in cash so asset will decrease and it is an expense so equity will decrease.

30) dividend paid in cash so assets will decrease and equity will decrease(retained earnings- dividend)

Date Assets Liabilities Equity April,2 N N N April,3 I I N April,4 D N D April,8 I N I April,15 I N I April,20 N N N April,30 D N D April,30 D N D

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