Question

In January, Tongo, Inc., a branding consultant, had the following transactions. Indicate the accounts, amounts, and direction of the effects on the accounting equation under the accrual basis.

a. (Sample) Received $10,600 cash for consulting services rendered in January.
b. Issued common stock to investors for $15,500 cash.
c. Purchased $17,600 of equipment, paying 25 percent in cash and owing the rest on a note due in two years.
d. Received $7,750 cash for consulting services to be performed in February.
e. Bought and received $1,100 of supplies on account.
f. Received utility bill for January for $2,070, due February 15.
g. Consulted for customers in January for fees totaling $16,500, due in February.
h. Received $13,500 cash for consulting services rendered in December.
i. Paid $550 toward supplies purchased in (e).

Answer 1

Cash + Supplies = Accounts Payable + common stock - dividends + sales commission - Rent expense.

$10,600 + 1,100 = $13,125 - $15,500 +$7,750 - $2,070 - $550 +13,500 + $16,500

Step-by-step explanation:

Tongo Inc. has incurred transaction in business for the routine business activities. These transaction have impact on asset, liabilities and equity side of the balance sheet. The effect of each transaction is given through the equation based on accrual concept.