Question

Question 7A

Selected transactions for Crane Corporation during September 2018, its first month in business, are presented below:

Sept.	1		Issued common shares in exchange for $18,000 cash.
	2		Paid $1,600 cash for rent for the month of September.
	5		Purchased equipment for $9,800, paying $1,800 in cash and the balance on account.
	8		Earned $7,300 in revenue, receiving $900 cash and $6,400 on account of services provided.
	12		Incurred $600 in advertising expenses on account.
	20		Paid $3,000 for repairs and maintenance expenses.
	25		Paid $4,800 cash on balance owed for equipment.
	27		Incurred and paid income taxes for the month amounting to $1,000.
	30		Declared and paid a $600 cash dividend.

A. Prepare an equation analysis of the September transactions. Use the following format. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or in parenthesis e.g. (15,000).)

Assets

=

Liabilities

+

Shareholders’ Equity

Cash

+

Accounts Receivable

+

Equipment

=

Accounts Payable

+

Common Shares

+

Revenues

-

Expenses

-

Dividends Declared

Sept.

1

Sept.

2

Sept.

5

Sept.

8

Sept.

12

Sept.

20

Sept.

25

Sept.

27

Sept.

30

Answer 1

	Cash	+	Account receivable	+	Equipment	=	Account payable	+	Common Stock	+	Revenue	-	Expense	-	Dividend declared
Sep 1	18000								18000
Sep 2	-1600												-1600
Sep 5	-1800				9800		8000
Sep 8	900		6400								7300
Sep 12							600						-600
Sep 20	-3000												-3000
Sep 25	-4800						-4800
Sep 27	-1000												-1000
Sep 30	-600														-600