Question

Exercise 4 Contabilidad al dia is an accounting company operated by Jose Ramos. At the end of April, the following transactions were recorded: 1. Advertising expenses of $ 1,000 were paid. 2. There was a purchase of office supplies on credit for $ 1,500. 3. Services rendered to customers on credit were billed for $ 5,000. 4. The payment was received for a service rendered at the time of s $ 800. 5. The Payment for services rendered on credit was received for $ 3,500. Indicate the effect of each transaction using the accounting equation

Answer 1

+ = + + + + + + + + + + + + + + + + + Total Assets Liabilities Stockholder's Equity Event Cash Supplies + Accounts Receivable Accounts Payable Common Stock Retained Earnings (1) $(1,000) + + $(1,000) (2) $1,500 $1,500 (3) $5,000 $5,000 (4) $800 $(800) (5) $3,500 $(3,500) Balance $3,300 $1,500 $700 $1,500 $4,000 Important Note: Event 4 statement is not complete, therefore I assumed payment from Accounts Receivable is received.If the Service is provided for Cash the effect on accounting equation will be Retained Cash Earnings $800 $800 + + = + +