contestada

In January, Tongo, Inc., a branding consultant, had the following transactions. Indicate the accounts, amounts, and direction of the effects on the accounting equation under the accrual basis.

a. Received $16,600 cash for consulting services rendered in January.
b. Issued common stock to investors for $15,000 cash.
c. Purchased $16,100 of equipment, paying 25 percent in cash and owing the rest on a note due in two years.
d. Received $12,500 cash for consulting services to be performed in February.
e. Bought and received $1,550 of supplies on account.
f. Received utility bill for January for $1,960, due February 15. Consulted for customers in January for fees totaling $19,600, due in February.
g. Received $14,300 cash for consulting services rendered in December.
i. Paid $775 toward supplies purchased in (e).

Respuesta :

anthougo

Answer:

Tongo, Inc.

Indication of the accounts, amounts, and direction of the effects on the accounting equation under the accrual basis:

a. Cash and Service Revenue: Assets  + $16,600 = Liabilities + Equity (Retained Earnings)  + $16,600

b. Cash and Common Stock: Assets + $15,000 = Liabilities + Equity (Common Stock) + $15,000

c. Equipment, Cash and Accounts Payable: Assets + $16,100 -$4,025 = Liabilities (Accounts Payable) + $12,075 + Equity

d. Cash and Deferred Revenue: Assets + $12,500 = Liabilities (Deferred Revenue) + $12,500 + Equity

e. Supplies and Accounts Payable: Assets + $1,550 = Liabilities (Accounts Payable) $1,550 + Equity

f. Utilities Expense and Utilities Payable: Assets = Liabilities (Utilities Payable) +$1,960 + Equity (Retained Earnings) - $1,960

f. Service Revenue + Accounts Receivable: Assets + $19,600 = Liabilities + Equity (Retained Earnings) + $19,600

g. Cash and Accounts Receivable: Assets +$14,300 - $14,300 = Liabilities + Equity

h

i. Cash and Accounts Payable: Assets - $775 = Liabilities - $775 + Equity

Explanation:

The accounting equation is always in balance with each business transaction.  The equation is the fulcrum of the double entry system of accounting.  This equation ensures that the two sides of debit and credit, or assets and liabilities plus equity are equal when it is applied strictly in accordance with generally accepted accounting principles.

Otras preguntas