Lita Lopez started Biz Consulting, a new business, and completed the following transactions during its first year of operations. Lita Lopez invested $65,000 cash and office equipment valued at $38,000 in the company in exchange for its common stock.
The company purchased an office suite for $41,000 cash.
The company purchased office equipment for $5,700 cash.
The company purchased $3,100 of office supplies and $1,600 of office equipment on credit.
The company paid a local newspaper $920 cash for printing an announcement of the office’s opening.
The company completed a financial plan for a client and billed that client $4,500 for the service.
The company designed a financial plan for another client and immediately collected a $8,700 cash fee.
The company paid $1,800 cash in dividends to the owner (sole shareholder).
The company received $3,500 cash as partial payment from the client described in transaction f.
The company made a partial payment of $800 cash on the equipment purchased in transaction d.
The company paid $2,000 cash for the office secretary’s wages for this period.
1. Create the following table.
Cash Accounts Receivable + Office Supplies + Office Equipment + Office Suite = Accounts Payable + L. Lopez, Capital - L. Lopez, Withdrawals + Revenues - Expenses
Use additions and subtractions within the table to show the dollar effects of each transaction on individual items of the accounting equation. Show new balances after each transaction.
2. Determine the company's net income.
Net Income $