Business, 19.09.2019 19:30 ErrorNameTaken505

The following transactions were completed by the company
(a) the company completed consulting work for a client and immediately collected $6,700 cash earned
(b) the company completed commission work for a client and sent a bill for $5,200 to be received within 30 days
(c) the company paid an assistant $2,000 cash as wages for the period
(d) the company collected $2,600 cash as a partial payment for the amount owed by the client in transaction b
(e) the company paid $940 cash for this period's cleaning services
enter the impact of each transaction on individual items of the accounting equation.

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Answer from: des7900

The Accounting Equation is As follows:

Assets = Liabilities + Stockholder's Equity

Statement (a)

With the cash collected there will be increase in assets by $6,700

And with the recognition of revenue there will be increase in stockholder's equity as retained earnings will increase by the amount $6,700,

Assets increase $6,700 = Liabilities + Stockholder's equity increase $6,700.

Statement (b)

Revenue is recognized and with that retained earnings will increase, and accordingly stockholder's equity will also increase by $5,200,

As the cash is not realized now, accounts receivables increase and accordingly, assets increase by $5,200.

Statement (c)

Cash paid as wages will reduce cash and accordingly assets by $2,000,

Also , with the recognition of expense, retained earnings will reduce and accordingly stockholder's equity will reduce by $2,000.

Statement (d)

This will increase the cash and decrease the accounts receivable by $2,600.

Thus on the assets side there will be + $2,600 and - $2,600 making it neutral.

No effect on the right side, as net effect on left side of equation = 0

Statement (e)

Cash paid for cleaning expense will decrease assets by $940,

And also this will decrease retained earnings and accordingly stockholder's equity will decrease by $940.

Answer from: mastertrapper

(a) The company completed consulting work for a client and immediately collected $6,700 cash earned - Assets (increase) = Liabilities (NA) + Equity (increase)

(b) The company completed commission work for a client and sent a bill for $5,200 to be received within 30 days - Assets (increase) = Liabilities (NA) + Equity (increase)

(c) The company paid an assistant $2,000 cash as wages for the period - Assets (decrease) = Liabilities (NA) + Equity (decrease)

(d) The company collected $2,600 cash as a partial payment for the amount owed by the client in transaction b - Assets (No effect) = Liabilities (NA) + Equity (NA)

(e) The company paid $940 cash for this period's cleaning services - Assets (decrease) = Liabilities + Equity (decrease)

*NA = Not Applicable

Explanation:

Accounting equation is defined by this formula: Assets = Liabilities + Equity

Cash of $6,700 collected by the company increase Cash (Asset) and increases Service revenue (Retained earnings/Equity).The commission work increases Accounts receivable (Asset) and Credit sales (Retained earnings/Equity) by $5,200.Payment of $2,000 for wages decreases Cash (Asset) and increases Wages expense (which decreases Equity).Collection of $2,600 has no effect on the asset, since the company would have debited Accounts receivable to credit Sales revenue initially, so the collection is a debit to Cash (Asset) and credit to Accounts receivable (Asset).Payment for cleaning services of $940 decrease Cash (Asset) and increase Operating expenses (ultimately decreases Equity).

Answer from: Quest

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!

Answer from: Quest

u = 30

continuing your method

$\frac{1}{10}$ = $\frac{1}{u}$ + $\frac{1}{15}$

subtract $\frac{1}{15}$ from both sides

$\frac{1}{u}$ = $\frac{1}{10}$ - $\frac{1}{15}$ thus

$\frac{1}{u}$ = $\frac{3}{30}$ - $\frac{2}{30}$

$\frac{1}{u}$ = $\frac{1}{30}$ ⇒ u = 30

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The following transactions were completed by the company
(a) the company completed consulting...

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