choose one of the two 5

Option #1: Using the Accounting Equation to Analyze Transactions

Bank One just approved a loan for Dante Inc. to start a website design and maintenance business. Dante Inc. is ready to purchase needed equipment, hire administrative help, and begin designing websites. During June, Dante’s first month of business, the following transactions occurred:

  1. Dante Inc. signed a note at the bank and received $20,000 cash.
  2. Dante issued shares of capital stock to its shareholders in the amount of $3,000 cash.
  3. Dante purchased a new computer and additional equipment for $3,000 cash.
  4. Dante purchased supplies worth $200 on account that should last two months.
  5. Dante hires Nancy Po to assist with administrative tasks. She will charge $100 per website for her assistance.
  6. Dante began working on its first two websites, one for J. Sanchito, and the other for Pauline Smith, a local businesswoman.
  7. Dante completed the website for Mr. Sanchito and sent him a bill for $700.
  8. Dante completed the website for Ms. Smith and sent her a bill for $540.
  9. Dante collected $600 in cash from Mr. Sanchito.
  10. Dante paid Nancy $100 cash for her work on Mr. Sanchito’s Web site.
  11. Dante received $500 cash in advance to work on a website for a local restaurant. Work on the site will not begin until July.
  12. Dante paid taxes of $200 in cash.

Required: Using the Excel template, complete the following activities:

  1. Analyze each transaction’s effect using the accounting equation, if needed.
  2. Provide a written explanation (one sentence) on the effect of the transaction on the accounting equation.

Each assignment must include a title page and reference page. Review the grading rubric to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

Option #2: Analyzing the Effect of Transactions Using the Accounting Equation

Detroit Roofing Company began operations in August and completed the following transactions during that first month of operations.

August 1 Detroit Roofing Company’s stockholders invested $45,000 cash in the company.
2 The company purchased $25,000 in office equipment. It paid $5,000 in cash and signed a note payable promising to pay the $20,000 over the next three years.
2 The company rented office space and paid $3,000 cash for the August rent.
6 The company installed a new roof for a customer and immediately collected $5,000.
7 The company paid a supplier $2,000 for roofing materials used on the August 6 job.
8 The company purchased a $2,500 copy machine for office use on credit.
9 The company completed work for additional customers on credit in the amount of $16,000.
15 The company paid its employees’ salaries of $2,300 for the first half of the month.
17 The company installed a new roof for a customer and immediately collected $2,400.
20 The company received $10,000 in payments from the customers billed on August 9.
28 The company paid $1,500 on the copy machine purchased on August 8. It will pay the remaining balance in June.
31 The company paid its employees’ salaries of $2,400 for the second half of the month.
31 The company paid a supplier $5,300 for roofing materials used on the remaining jobs completed during August.
31 The company paid $450 cash for this month’s utility bill.

Required: Using the Excel Template, complete the following:

Show the effects of the transactions on the accounts using the accounting equation. Record increases and decreases in the appropriate columns in the table. Do not determine new account balances after each transaction. Determine the final total for each account and verify that the equation is in balance.

Each assignment must include a title page and reference page. Review the grading rubric to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

 
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