Carla Vista Co. entered into these transactions during May 2017, its first month
ID: 2338370 • Letter: C
Question
Carla Vista Co. entered into these transactions during May 2017, its first month of operations. 1. Stockholders invested $38,500 in the business in exchange for common stock of the company 2. Purchased computers for office use for $ 26,200 from Ladd on account 3. Paid $ 2,800 cash for May rent on storage space. 4. Performed computer services worth $16,300 on account 5. Performed computer services for Wharton Construction Company for $4,100 cash. 6. Paid Western States Power Co.$6,200 cash for energy usage in May. 7. Paid Ladd for the computers purchased in (2) 8. Incurred advertising expense for May of $ 2,400 on account. 9. Received$10,400 cash from customers for contracts billed in (4)Explanation / Answer
Accounting equation
Assets=
Liabilities+
Shareholder's Equity
Event
Cash+
Accounts receivables+
Equipment =
Accounts Payable +
Common Stock +
Retained Earnings
Revenues-
Expenses
1
$ 38,500.00
$ 38,500.00
2
$ 26,200.00
$ 26,200.00
3
$ (2,800.00)
$ 2,800.00
Rent Expense paid
4
$ 16,300.00
$ 16,300.00
Service revenue
5
$ 4,100.00
$ 4,100.00
Service revenue
6
$ (6,200.00)
$ 6,200.00
Utility expense
7
$ (26,200.00)
$ (26,200.00)
8
$ 2,400.00
$ 2,400.00
Advertisement expense
9
$ 10,400.00
$(10,400.00)
Total
$ 17,800.00
$ 5,900.00
$ 26,200.00
$ 2,400.00
$ 38,500.00
$ 20,400.00
$ 11,400.00
Accounting equation
Assets=
Liabilities+
Shareholder's Equity
Event
Cash+
Accounts receivables+
Equipment =
Accounts Payable +
Common Stock +
Retained Earnings
Revenues-
Expenses
1
$ 38,500.00
$ 38,500.00
2
$ 26,200.00
$ 26,200.00
3
$ (2,800.00)
$ 2,800.00
Rent Expense paid
4
$ 16,300.00
$ 16,300.00
Service revenue
5
$ 4,100.00
$ 4,100.00
Service revenue
6
$ (6,200.00)
$ 6,200.00
Utility expense
7
$ (26,200.00)
$ (26,200.00)
8
$ 2,400.00
$ 2,400.00
Advertisement expense
9
$ 10,400.00
$(10,400.00)
Total
$ 17,800.00
$ 5,900.00
$ 26,200.00
$ 2,400.00
$ 38,500.00
$ 20,400.00
$ 11,400.00