Reference no: EM133147141

Question - Grant Appraisal Service provides commercial and industrial appraisals and feasibility studies. On January 1, the assets and liabilities of the business were the following:

Cash $11,700

Accounts Receivable 15,800

Accounts Payable 600

Notes Payable 3,500

Common Stock 18,400

Retained Earnings 5,000

The following transactions occurred during the month of January:

1. Paid rent for January, $950.

2. Received $8,800 payment on customers' accounts.

3. Paid $750 on accounts payable.

4. Received $2,500 for services performed for cash customers.

5. Borrowed $5,000 from a bank and signed a note payable for that amount.

6. Billed the city $6,200 for a feasibility study performed; billed various other credit customers, $1,900.

7. Paid the salary of an assistant, $3,500.

8. Received invoice for January utilities, $410.

9. Paid $6,000 cash for employee salaries.

10. Purchased a van (on January 31) for business use, $7,200.

11. Paid $150 to bank as January interest on the outstanding note payable.

Required -

(a) Set up an accounting equation in columnar form with the following individual assets, liabilities, and stockholders' equity accounts: Cash, Accounts Receivable, Van, Accounts Payable, Notes Payable, Common Stock, and Retained Earnings. Enter the January 1 balances below each item.

(b) Show the impact (increase or decrease) of transactions 1-11 on the beginning balances, and total the columns to show that assets equal liabilities plus stockholders' equity as of January 31.