Helga Anderson started a new business and completed these transactions during December.
Dec. 1 Helga Anderson transferred $68,800 cash from a personal savings account to a checking account in the name of Anderson Electric in exchange for common stock.
2 The company rented office space and paid $1,800 cash for the December rent.
3 The company purchased $13,000 of electrical equipment by paying $4,800 cash and agreeing to pay the $8,200 balance in 30 days.
5 The company purchased office supplies by paying $1,000 cash.
6 The company completed electrical work and immediately collected $1,600 cash for these services.
8 The company purchased $2,680 of office equipment on credit.
15 The company completed electrical work on credit in the amount of $6,000.
18 The company purchased $360 of office supplies on credit.
20 The company paid $2,680 cash for the office equipment purchased on December 8.
24 The company billed a client $1,000 for electrical work completed; the balance is due in 30 days.
28 The company received $6,000 cash for the work completed on December 15.
29 The company paid the assistant’s salary of $1,500 cash for this month.
30 The company paid $570 cash for this month’s utility bill.
31 The company paid $900 cash for dividends.
Required
1. Arrange the following asset, liability, and equity titles in a table like Exhibit 1.9: Cash; Accounts Receivable; Office Supplies; Office Equipment; Electrical Equipment; Accounts Payable; Common Stock; Dividends; Revenues; and Expenses.
2. Use additions and subtractions to show the effects of each transaction on the accounts in the accounting equation. Show new balances after each transaction.
3. Use the increases and decreases in the columns of the table from part 2 to prepare an income statement, a statement of retained earnings, and a statement of cash flows—each of these for the current month. Also prepare a balance sheet as of the end of the month.
Analysis Component
4. Assume that the owner investment transaction on December 1 was $49,000 cash instead of $68,800 and that Anderson Electric obtained another $19,800 in cash by borrowing it from a bank. Explain the effect of this change on total assets, total liabilities, and total equity.