Gwen Stefani decides to incorporate a company and open a pizza bar near the local university campus. Analyse the following transactions for the month of July in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. It is not necessary to identify the cause of changes in equity.
Transactions:
(1) Gwen Stefani invests $25,000 cash in exchange for share capital to start a pizza bar business on July 1.
(2) Purchased baking equipment for $5,000 paying $3,000 in cash and the remainder is due in 30 days.
(3) Purchased cooking supplies for $1,200 cash.
(4) Received an account from Campus News for $300 for advertising in the campus newspaper.
(5) Cash receipts from customers for pizza sales amounted to $1,500.
(6) Paid salaries of $200 to student workers.
(7) Invoiced the Tiger Football Team $100 for pizzas ordered.
(8) Paid $300 to Campus News for advertising that was previously invoiced in Transaction 4.
(9) Gwen Stefani was paid dividends of $700.
(10) Incurred electricity expenses for month on account, $200.

Question

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The Answer of Gwen Stefani decides to incorporate a company and open a pizza bar near the local university campus. Analyse the following transactions for the month of July in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. It is not necessary to identify the cause of changes in equity.
Transactions:
(1) Gwen Stefani invests $25,000 cash in exchange for share capital to start a pizza bar business on July 1.
(2) Purchased baking equipment for $5,000 paying $3,000 in cash and the remainder is due in 30 days.
(3) Purchased cooking supplies for $1,200 cash.
(4) Received an account from Campus News for $300 for advertising in the campus newspaper.
(5) Cash receipts from customers for pizza sales amounted to $1,500.
(6) Paid salaries of $200 to student workers.
(7) Invoiced the Tiger Football Team $100 for pizzas ordered.
(8) Paid $300 to Campus News for advertising that was previously invoiced in Transaction 4.
(9) Gwen Stefani was paid dividends of $700.
(10) Incurred electricity expenses for month on account, $200.

Gwen Stefani Decides to Incorporate a Company and Open a Pizza