Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver

Exercise 37

Using the accounting equation for transaction analysis
Missy Crone owns and operates a public relations firm called Top 40, Inc The following amounts summarize her business on August 31, 2012:

During September 2012, the business completed the following transactions:
a. Issued common stock and received cash of $10,000.
b. Performed service for a client and received cash of $1,000.
c. Paid off the beginning balance of accounts payable.
d. Purchased supplies from OfficeMax on account, $700.
e. Collected cash from a customer on account, $500.
f. Received cash of $1,900 and issued common stock.
g. Consulted for a new band and billed the client for services rendered, $5,800
h. Recorded the following business expenses for the month:
1. Paid office rent, $900.
2. Paid advertising, $400.
i. Returned supplies to OfficeMax for $80 from item d, which was the cost of the supplies.
j. Paid cash dividends of $2,700.
Requirement
1. Analyze the effects of the preceding transactions on the accounting equation of Top 40. Adapt the format to that of Exhibit 1-6.