Exercise 3-3 During 2017, its first year of operations as a delivery service, Gr

Question

Exercise 3-3 During 2017, its first year of operations as a delivery service, Grouper Corp. entered into the following transactions 1. Issued shares of common stock to investors in exchange for $123,000 in cash. 2. Berrowed $37,000 by issulng bonds. 3. Purchased delivery trucks for $64,000 cash. 4. Received $15,000 from customers for services performed. 5. Purchased supplies fer $6,100 on account. 6. Paid rent of $$,800 7. Performed services on account for $11,800. 8. Paid salaries of $27,700. 9. Paild a dividend of $10,400 to shareholders. Using the foilowing tabular analysis, show the effect of each transaction on the accounting equation. Put negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability ok Equity item that was reduced, see Ilustration 3-3 for example.) for changes to Stockholders' Equity in the far righe column. (Ir a transaction causes a a Assets Liabilities Stockholders' Equity CashAccounts Cemmon ReceivableSupplies EquipmentAccounts Bonds Payable Paya Retained Earnings RevenuesExpenses Dividends ) s

Explanation / Answer

Solution:

Event Assets = Liabilities + Stockholder's Equity Retained Earnings Cash + Accounts Receivables + Supplies + Equipment = Accounts Payable + Bond Payable Common Stock + Revenue - Expenditure - Dividend Explanation 1 $123,000.00 $123,000.00 Issued shares for cash 2 $37,000.00 $37,000.00 3 -$64,000.00 $64,000.00 4 $15,000.00 $15,000.00 Service rendered for cash 5 $6,100.00 $6,100.00 6 -$5,800.00 $5,800.00 Rent payment in cash 7 $11,800.00 $11,800.00 Service rendered on account 8 -$27,700.00 $27,700.00 Salaries paid 9 -$10,400.00 $10,400.00 Dividend payment

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