Fundamental Accounting Principles
Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
Question
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Chapter 1, Problem 13E
To determine

Concept Introduction:

Accounting equation:

It reflects the concept of double entry accounting. The accounting equation displays that all assets are either financed through shareholders funds i.e. equity or by borrowing money i.e. liabilities. Thus, the accounting equation is:          Asset=Liabilities+Equity

To Prepare:

The table showing the effects of transactions completed by the Ming Chen.

Expert Solution & Answer
Check Mark

Explanation of Solution

  1. Owner invested $60,000 cash in the company along with equipment that had a $15,000 market value.
    Assets = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    +$60,000 + $15,000        $75,000
    $60,000 + $15,000 = $75,000
  1. The Company paid $1,500 cash for rent of office space for the month.
    Assets = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    $60,000 + $15,000 = $75,000
    -$1,500                             -$1,500
    $58,500 + $15,000 = $73,500
  1. The company purchased $10,000 of additional equipment on credit (payment due within 30 days).
    Assets = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    $58,500 $15,000 = $73,500
            +$10,000 +$10,000                            
    $58,500 + $25,000 = $10,000 + $73,500
  1. The company completed work for a client and immediately collected the $2,500 cash earned.
    Assets = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    $58,500 $25,000 = $10,000 + $73,500
    +$2,500                      +$2,500                            
    $61,000 + $25,000 = $10,000 + $76,000
  1. The company completed work for a client and sent a bill for $8,000 to be received within 30 days.
    Assets = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    $61,000 $25,000 = $10,000 + $76,000
    + $8,000                      +$8,000                            
    $61,000 + $8,000 + $25,000 = $10,000 + $84,000
  1. The company purchased additional equipment $6,000 for cash.
    Assets = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    $61,000 + $8,000 $25,000 = $10,000 + $84,000
    -$6,000 +$6,000                                                 
    $55,000 + $8,000 + $31,000 = $10,000 + $84,000
  1. The company paid an assistant $3000 cash as wages for the month.
    Assets = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    $55,000 + $8,000 $31,000 = $10,000 + $84,000
    -$3,000                             -$3,000                                                 
    $52,000 + $8,000 + $31,000 = $10,000 + $81,000
  1. The company collected $5000 cash as a partial payment for the amount owed by the client in transaction e.
    Assets = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    $52,000 + $8,000 $31,000 = $10,000 + $81,000
    +$5,000 -$5,000                                                                                    
    $57,000 + $3,000 + $31,000 = $10,000 + $81,000
  1. The company paid $10,000 cash to settle the liability created in transaction c
    Assets = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    $57,000 + $3,000 $31,000 = $10,000 + $81,000
    -$10,000        -$10,000                                                                                    
    $47,000 + $3,000 + $31,000 = $81,000
  1. Owner withdrew $1,000 cash from the company for personal use
    Assets        = Liabilities + Equity
    Cash + Accounts + Equipment = Accounts + M Chen's - M Chen's + Revenues - Expenses Receivables        Payables Capital Withdrawals
    $47,000 + $3,000 $31,000 = $81,000
    -$1,000                      -$1,000                                                                                    
    $46,000 + $3,000 + $31,000 = $80,000

Hence, the effects of transactions of Ming Chen are shown in the above tables along with the closing balances after each transaction.

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Chapter 1 Solutions

Fundamental Accounting Principles

Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - A business reports its own office stationary on...Ch. 1 - Why is the revenue recognition principle needed?...Ch. 1 - Prob. 16DQCh. 1 - Prob. 17DQCh. 1 - What events or transactions change equity?Ch. 1 - Prob. 19DQCh. 1 - What do accountants mean by the term revenue?Ch. 1 - 21. Define net income and explain its...Ch. 1 - Identify the four basics financial statements of a...Ch. 1 - Prob. 23DQCh. 1 - 24. Give two examples of expenses a business might...Ch. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Prob. 28DQCh. 1 - Prob. 29DQCh. 1 - Prob. 30DQCh. 1 - B Explain why investing (assets) and financing...Ch. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 1QSCh. 1 - Prob. 2QSCh. 1 - Prob. 3QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Prob. 6QSCh. 1 - This icon highlights assignments that enhance...Ch. 1 - Prob. 8QSCh. 1 - Prob. 9QSCh. 1 - Prob. 10QSCh. 1 - Prob. 11QSCh. 1 - Identifying items with financial statements P2...Ch. 1 - P2 Classify each of the following items as...Ch. 1 - P2 Classify each of the following items as assets...Ch. 1 - Preparing an income statement P2...Ch. 1 - Prob. 16QSCh. 1 - Prob. 17QSCh. 1 - Prob. 1ECh. 1 - Exercise 1-2 Identifying accounting users and uses...Ch. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Exercise 1-14 Analyzing return on assets A2 Swiss...Ch. 1 - Prob. 15ECh. 1 - Prob. 16ECh. 1 - Exercise 117 Preparing 117 P2 Use the information...Ch. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Exercise 1-22 Preparing an income statement for a...Ch. 1 - Exercise 1-23 Using the accounting equation A1...Ch. 1 - Problem 1-1A Identifying effects of transactions...Ch. 1 - Prob. 2APSACh. 1 - Problem 1-3A Preparing an income statement P2 As...Ch. 1 - Problem 1-4A Preparing a statement of owner's...Ch. 1 - Problem 1-5A Preparing a balance sheet P2 Use the...Ch. 1 - Problem 1-6A Preparing a statement of cash flows...Ch. 1 - Prob. 7APSACh. 1 - Prob. 8APSACh. 1 - Prob. 9APSACh. 1 - Prob. 10APSACh. 1 - Prob. 11APSACh. 1 - Prob. 12APSACh. 1 - Prob. 13APSACh. 1 - Prob. 14APSACh. 1 - Problem 1-1B Identifying effects of transactions...Ch. 1 - Prob. 2BPSBCh. 1 - Prob. 3BPSBCh. 1 - Problem 1-4B Preparing a statement of owner's...Ch. 1 - Prob. 5BPSBCh. 1 - Prob. 6BPSBCh. 1 - Prob. 7BPSBCh. 1 - Prob. 8BPSBCh. 1 - Prob. 9BPSBCh. 1 - Prob. 10BPSBCh. 1 - Prob. 11BPSBCh. 1 - Problem 112BA Identifying risk and return A3 All...Ch. 1 - Prob. 13BPSBCh. 1 - Prob. 14BPSBCh. 1 - On October 1. 2019, Santana Rev launched a...Ch. 1 - Prob. 1AACh. 1 - Prob. 2AACh. 1 - Prob. 3AACh. 1 - Prob. 1BTNCh. 1 - Prob. 2BTNCh. 1 - Visit the EDGAR database at SEC.gov. Access the...Ch. 1 - Prob. 4BTNCh. 1 - Prob. 5BTNCh. 1 - Prob. 6BTN
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