Ming Chen began a professional practice on June I and plans

Ming Chen began a professional practice on June I and plans to prepare financial statements at the end cf each month. During June, Ming Chen (the owner) completed these transactions: a. Owner invested $60,000 cash in the company along with equipment that had a $15.000 market valu b. The company paid $1,500 cash for rent of office space for the month. c. The company purchased $10.000 of additional equipment on credit (payment due within 30 days) d. The company completed work for a client and immediately collected the $2,500 cash earned o. The company completed work for a client and sent a bill for $8,000 to be received within 30 days f. The company purchased additional equipment for $6,000 cash. g. The company paid an assistant $3,000 cash as wages for the month h. The company collected $5.000 cash as a partial payment for the amount owed by the client in trans- action e i. The company paid $10,000 cash to settle the liability created in transaction c. j. Owner withdrew $1,000 cash from the company for personal use.

Solution

S.no. Assets = Liabilities + Owner\'s Equity Cash + Accounts Receivable + Supplies + Equipment Accounts Payable Ming Chen, Capital - Ming Chen, Withdrawl + Revenues - Expenses a.      60,000.00 + + +      15,000.00 = +          75,000.00 - + - b.      (1,500.00) + + + = + - + -           1,500.00 Bal.      58,500.00 +                          -   +                       -   +      15,000.00 =                           -   +          75,000.00 -                         -   +                       -   -           1,500.00 c. + + +      10,000.00 =            10,000.00 + - + - Bal.      58,500.00 +                          -   +                       -   +      25,000.00 =            10,000.00 +          75,000.00 -                         -   +                       -   -           1,500.00 d.        2,500.00 + + + = + - +          2,500.00 - Bal.      61,000.00 +                          -   +                       -   +      25,000.00 =            10,000.00 +          75,000.00 -                         -   +          2,500.00 -           1,500.00 e. +             8,000.00 + + = + - +          8,000.00 - Bal.      61,000.00 +             8,000.00 +                       -   +      25,000.00 =            10,000.00 +          75,000.00 -                         -   +       10,500.00 -           1,500.00 f.      (6,000.00) + + +         6,000.00 = + - + - Bal.      55,000.00 +             8,000.00 +                       -   +      31,000.00 =            10,000.00 +          75,000.00 -                         -   +       10,500.00 -           1,500.00 g.      (3,000.00) + + + = + - + -           3,000.00 Bal.      52,000.00 +             8,000.00 +                       -   +      31,000.00 =            10,000.00 +          75,000.00 -                         -   +       10,500.00 -           4,500.00 h.        5,000.00 +           (5,000.00) + + = + - + - Bal.      57,000.00 +             3,000.00 +                       -   +      31,000.00 =            10,000.00 +          75,000.00 -                         -   +       10,500.00 -           4,500.00 i.    (10,000.00) + + + =         (10,000.00) + - + - Bal.      47,000.00 +             3,000.00 +                       -   +      31,000.00 =                           -   +          75,000.00 -                         -   +       10,500.00 -           4,500.00 j.      (1,000.00) + + + = + -            1,000.00 + - Bal.      46,000.00 +             3,000.00 +                       -   +      31,000.00 =                           -   +          75,000.00 -            1,000.00 +       10,500.00 -           4,500.00 Total Assets = $80,000 = Total Liabilities = $0 + Total Owners\' Equity = $80,000 = Total Liabilities & Owners\' Equity = $80,000