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Financial & Managerial Accounting
Found in: Page 40
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Sanyu Sony started a new business and completed these transactions during December.

Dec. 1 Sanyu Sony transferred $65000 cash from a personal savings account to a checking account in the name of Sony Electric in exchange for its common stock.

2 The company rented office space and paid $1000 cash for the December rent.

3 The company purchased $13000 of electrical equipment by paying $4800 cash and agreeing to pay the $8200 balance in 30 days.

5 The company purchased office supplies by paying $800 cash.

6 The company completed electrical work and immediately collected $1200 cash for these services.

8 The company purchased $2530 of office equipment on credit.

15 The company completed electrical work on credit in the amount of $5000.

18 The company purchased $350 of office supplies on credit.

20 The company paid $2530 cash for the office equipment purchased on December 8.

24 The company billed a client $900 for electrical work completed; the balance is due in 30 days.

28 The company received $5000 cash for the work completed on December 15.

29 The company paid the assistant’s salary of $1400 cash for this month.

30 The company paid $540 cash for this month’s utility bill.

31 The company paid $950 cash in dividends to the owner (sole shareholder).

Required 1. Create the following table similar to the one in Exhibit 1.9

Dividends are the profits distributed to the shareholders and an accounting equation is prepared. The total asset is equal to the total of liabilities and equity that is $76,760.

See the step by step solution

Step by Step Solution

Definition of dividends

The dividends are defined as the part of profits that are distributed among the owner or the shareholder of the company.

Preparation of Accounting equation

Assets=Liabilities+Equity

Date

Cash ($)

AR ($)

Office

Off

Elect

Accounts

Common

-Div

Rev

-Exp

Supplies ($)

Equip ($)

Equip ($)

Payable ($)

Stock ($)

($)

($)

($)

Dec

1

65,000

65,000

Bal

65,000

65,000

2

-1,000

-1,000

Bal

64,000

65,000

-1,000

3

-4,800

13,000

8,200

Bal

59,200

13,000

8,200

65,000

-1,000

5

-800

800

Bal

58,400

800

13,000

8,200

65,000

-1,000

6

1,200

1,200

Bal

59,600

800

13,000

8,200

65,000

1,200

-1,000

8

2,530

2,530

Bal

59,600

800

2,530

13,000

10,730

65,000

1,200

-1,000

15

5,000

5,000

Bal

59,600

5,000

800

2,530

13,000

10,730

65,000

6,200

-1,000

18

350

350

Bal

5,9600

5,000

1,150

2,530

13,000

11,080

65,000

6,200

-1,000

20

-2,530

-2,530

Bal

57,070

5,000

1,150

2,530

13,000

8,550

65,000

6,200

-1,000

24

900

900

Bal

57,070

5,900

1,150

2,530

13,000

8,550

65,000

7,100

-1,000

28

5,000

-5,000

Bal

62,070

900

1,150

2,530

13,000

8,550

65,000

7,100

-1,000

29

-1,400

-1,400

Bal

60,670

900

1,150

2,530

13,000

8,550

65,000

7,100

-2,400

30

-540

-540

Bal

60,130

900

1,150

2,530

13,000

8,550

65,000

7,100

-2,940

31

-950

-950

Bal

59,180

900

1,150

2,530

13,000

8,550

65,000

-950

7,100

-2,940

Total

59,180

900

1,150

2,530

13,000

8,550

65,000

-950

7,100

-2,940

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