Strand Corp started an accounting-exam consulting business for wayward accounting students on July 1, 2022, and for

the month had the following transactions:

1. Started the company with a $170,000 investment in return for stock

2. Sold consulting services for $300,000, 50% on account, the remainder for cash

3. Purchased office supplies of $10,000 on account

4. Paid wages, $120,000

5. Purchased a computer system for $15,000 by putting 10% down and borrowing the remainder from the bank

(current value = $20,000)

6. Collected $125,000 from customers previously sold to on account

7. Paid the bank 50% of what was owed them

8. Paid the following expenses:

a. Utilities- $25,000

b. Rent- $60,000

c. Insurance- $15,000

9. Paid dividends of $2,000

10. Additional investment in the company was made for $80,000

REQUIRED:

1. Using the Balance Sheet Equation (A=L÷E), account for the transactions above (2opts)

2. Calculate ending account balances to prove that A=L+E (4pts)

3. Prepare an Income Statement in proper form (6pts)

4. Prepare a Balance Sheet in proper form (10 pts)

Answer rating: 100% (QA)

Using the Balance Sheet Equation ALE account for the transactions above Assets A Liabilities L Equit... View the full answer