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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 Analysis Component 4. Assume that the owner investment transaction on December 1 was $49,000 cash instead of $65,000 and that Sony Electric obtained another $16,000 in cash by borrowing it from a bank. Compute the dollar effect of this change on the month-end amounts for (a) total assets, (b) total liabilities, and (c) total equity.

The total assets will be $76,760, total liabilities will be $24,550 and the total equity will be $52,210.

See the step by step solution

Step by Step Solution

Computation of total assets

Computation of total liabilities

Computation of Total equity

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