Sage Hill Company, a computer services company, entered into these transactions during May, its first month...

 

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Sage Hill Company, a computer services company, entered into these transactions during May, its first month of operations. 1. Stockholders invested $44,000 in the business in exchange for common stock of the company. 2. Purchased computers for office use (recorded as Equipment) for $33,000 from Ladd Co. on account. 3. Paid $4,400 cash for May rent on storage space. 4. Performed computer services worth $20,900 on account. 5. Performed computer services for Wharton Construction Company for $5,500 cash. 6. Paid Western States Power Co. $8,800 cash for energy usage in May. 7. Paid Ladd Co. for the computers purchased in (2). 8. Incurred advertising expense for May of $1,430 on account. 9. Received $13,200 cash from customers for contracts billed in (4). Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to revenues or expenses in the right-hand column. Decreases in assets, liabilities, or stockholders' equity require a negative sign or parentheses. Increases in expenses require a negative sign or parentheses. Sage Hill Company, a computer services company, entered into these transactions during May, its first month of operations. 1. Stockholders invested $44,000 in the business in exchange for common stock of the company. 2. Purchased computers for office use (recorded as Equipment) for $33,000 from Ladd Co. on account. 3. Paid $4,400 cash for May rent on storage space. 4. Performed computer services worth $20,900 on account. 5. Performed computer services for Wharton Construction Company for $5,500 cash. 6. Paid Western States Power Co. $8,800 cash for energy usage in May. 7. Paid Ladd Co. for the computers purchased in (2). 8. Incurred advertising expense for May of $1,430 on account. 9. Received $13,200 cash from customers for contracts billed in (4). Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to revenues or expenses in the right-hand column. Decreases in assets, liabilities, or stockholders' equity require a negative sign or parentheses. Increases in expenses require a negative sign or parentheses.

Answer rating: 100% (QA)

Here is the tabular analysis of the transactions fo... View the full answer