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Homework answers / question archive / Below is a list of activities for Purple Cow Incorporated
Below is a list of activities for Purple Cow Incorporated.
Required:
For each activity, indicate the impact on the accounting equation. After doing so for all transactions, ensure that the accounting equation remains in balance. The first item is provided as an example.
| Transaction | Assets | = | Liabilities | + | Stockholders' Equity | |
| 1. | Provide services to customers on account, $1,640. | $1,640 | $0 | $1,640 | ||
| 2. | Pay $380 for current month's rent. | |||||
| 3. | Hire a new employee, who will be paid $540 at the end of each month. | |||||
| 4. | Pay $100 for advertising aired in the current period. | |||||
| 5. | Purchase office supplies for $380 cash. | |||||
| 6. | Receive cash of $1,040 from customers in (1) above. | |||||
| 7. | Obtain a loan from the bank for $7,400. | |||||
| 8 | Receive a bill of $530 for utility costs in the current period. | |||||
| 9. | Issue common stock for $10,400 cash. | |||||
| 10. | Pay $540 to employee in (3) above. | |||||
| Totals |
| Particulars | Assets | Liabilities | Stockholders' equity |
|---|---|---|---|
| Services to customers | 1,640 | - | 1,640 |
| Current month rent | (380) | - | (380) |
| New employee | - | 540 | (540) |
| Advertising | (100) | - | (100) |
| Office supplies | 380 | - | - |
| (380) | - | - | |
| Received cash | (1,040) | - | - |
| 1,040 | - | - | |
| Obtained loan | 7,400 | - | 7,400 |
| Utility costs | - | 530 | (530) |
| Common stock issued | 10,400 | 10,400 | |
| Payment to employee | (540) | (540) | - |
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