Show the effects of the previous transactions on the accounting equation.


Question Description:

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Debra Menge started her own consulting firm, Menge Consulting, on May 1, 2014. The following transactions occurred during the month of May. May 1 Debra invested $7,000 cash in the business. 2 Paid $900 for office rent for the month. 3 Purchased $600 of supplies on account. 5 Paid $125 to advertise in the County News. 9 Received $4,000 cash for services performed. 12 Withdrew $1,000 cash for personal use. ; 15 Performed $5,400 of services on account. 17 Paid $2,500 for employee salaries. 20 Paid for the supplies purchased on account on May 3. 23 Received a cash payment of $4,000 for services performed on account on May 15. 26 Borrowed $5,000 from the bank on a note payable. 29 Purchased equipment for $4,200 on account. 30 Paid $275 for utilities. Instructions (a) Show the effects of the previous transactions on the accounting equation. (b) Prepare an income statement for the month of May. (c) Prepare a balance sheet at May 31, 2014.

Answer

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