Question

Green Wave Company has the following transactions.
1. Pay for rent in the current month, $1,500.
2. Purchase equipment for $40,000 cash.
3. Purchase office supplies on account for $1,000.
4. Provide services for $20,000 on account.
5. Pay workers’ salaries of $5,000 for the current month.
6. Receive $15,000 from customers in (3) above.
7. Receive cash of $5,000 in advance from a customer.

Required:
For each transaction, describe the dual effect on the accounting equation. For example, in the first transaction,
(1) Assets increase
(2) Stockholders’ equity increases.



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  • CreatedJuly 15, 2014
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