Manning Company entered into these transactions during May 2014, its first month of operations.

1. Stockholders invested $40,000 in the business in exchange for common stock of the company.

2.Purchased computers for office use for $30,000 from Dell on account.

3.Paid $4,000 cash for May rent on storage space.

4.Performed computer services worth $19,000 on account.

5.Performed computer services to Lawton Construction Company for $5,000 cash.

6.Paid Southern States Power Co. $8,000 cash for energy usage in May.

7.Paid Dell for the computers purchased in (2).

8.Incurred advertising expense for May of $1,300 on account.

9.Received $12,000 cash from customers for contracts billed in (4).

Instructions
Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders’ Equity in the right-hand margin. Use Illustration 3-3 (page 110) as a model.

Transcribed Image Text:

Assets Liabilities Stockholders' Equity Retained Earnings Expenses Accounts Accounts Common Cash + Receivable+Equipment = Payable Stock + Revenues Dividends