Question

Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During June, Ming Chen (the owner) completed these transactions.
a. Owner invested $57,000 cash in the company along with equipment that had a $27,000 market value in exchange for its common stock.
b. The company paid $2,500 cash for rent of office space for the month. The company purchased $18,000 of additional equipment on credit (payment due within 30 days).
c. The company completed work for a client and immediately collected the $2,400 cash earned.
d. The company completed work for a client and sent a bill for $9,000 to be received within 30 days.
e. The company purchased additional equipment for $6,900 cash.
f. The company paid an assistant $3,700 cash as wages for the month.
g. The company collected $4,800 cash as a partial payment for the amount owed by the client in transaction e.
h. The company paid $18,000 cash to settle the liability created in transaction c.
i. The company paid $1,800 cash in dividends to the owner (sole shareholder).

Required:
Create the transaction table.

Answer 1

Answer:

Ming Chen Professionals

Transaction Table:

Assets                       =                       Liabilities        +        Equity

a. Cash $57,000 Equipment $27,000   =       Common Stock $84,000

b. Cash ($2,500)                                     =        Rent Expense ($2,500)

Equipment $18,000                    =    Accounts Payable $18,000

c. Cash $2,400                                       =        Service Revenue $2,400

d. Accounts Receivable $9,000            =        Service Revenue $9,000

e. Equipment $6,900                             =        Cash ($6,900)

f. Cash $3,700                                        =        Salaries Expense $3,700  

g. Cash $4,800 Accounts Receivable ($4,800)

h. Cash ($18,000)                     =     Accounts Payable ($18,000)  

i. Cash ($1,800)                                      =         Cash Dividends ($1,800)

Explanation:

a) Data and Analysis of Transactions:

a. Cash $57,000 Equipment $27,000 Common Stock $84,000

b. Rent Expense $2,500 Cash $2,500

Equipment $18,000 Accounts Payable $18,000

c. Cash $2,400 Service Revenue $2,400

d. Accounts Receivable $9,000 Service Revenue $9,000

e. Equipment $6,900 Cash $6,900

f. Salaries Expense $3,700 Cash $3,700

g. Cash $4,800 Accounts Receivable $4,800

h. Accounts Payable $18,000 Cash $18,000

i. Cash Dividends $1,800 Cash $1,800