Using the accounting equation for transaction analysis, preparing financial statements, and calculating return on assets (ROA)

P1-54 is the first problem in a sequence that begins an accounting cycle. The cycle is continued in Chapter 2 and completed in Chapter 5. P1-54 Using the accounting equation for transaction analysis, preparing financial statements, and calculating return on assets (ROA) Davis Consulting began operations and completed the following transactions during December, 2014: Dec. 2 Owner contributed $18,000 cash in exchange for capital. 2 Paid monthly office rent, $550. 3 Paid cash for a computer, $1,800. This equipment is expected to remain in service for five years. 4 Purchased office furniture on account, $4, 200. The furniture should last for five years. 5 Purchased office supplies on account, $900. 9 Performed consulting service for a client on account, $1,500. 12 Paid utilities expenses, $250. 18 Performed service for a client and received cash of $1,100. 21 Received $1,400 in advance for client service to be performed over the next 30 days. (This increases the Unearned Revenue account which is a liability. This account will be explained in more detail in Chapter 2.) 21 Hired an administrative assistant to be paid $2,055 on the 20th day of each month. The secretary begins work immediately. 26 Paid $400 on account. 28 Collected $300 on account. 30 Davis withdrew $ 1,400. Requirements Analyze the effects of Davis Consulting transactions on the accounting equation. Use the format of Exhibit 1-4, and include these headings: Cash; Accounts Receivable; Office Supplies; Equipment; Furniture; Accounts Payable; Unearned Revenue; Davis, Capital; Davis, Withdrawals; Service Revenue; Rent Expense; and Utilities Expense. Prepare the income statement of Davis Consulting for the month ended December 31, 2014. Prepare the statement of owners equity for the month ended December 31, 2014. Prepare the balance sheet as of December 31, 2014. Calculate the return on assets for Davis Consulting