Accounting Equations
Ending Stockholders' equity=
Beginning stockholders' equity + change in stockholders' equity
Issuance of stock=
Change in stockholders' equity - net income + dividends
Simmons Company pays money for insurance in advance of using the insurance, $9,200.
Individual asset accounts - increase, decrease no change- individual liability accounts, capital stock, retained earnings
Change in stockholders' equity =
Insurance of stock + net income- dividends
Increase in stockholders' equity=
Insurance of stock+ revenue-expenses- dividends
Assets =
Liabilities+ Stockholders' Equity
Lewis Company sends invoices to all clients for services rendered for a total of $2,900.
increase - individual asset accounts, retained earnings no change - individual liability accounts, capital stock
Change in stockholders' equity equation =
Ending stockholders' equity - beginning stockholders' equity
beginning stockholder's equity
Ending stockholders' equity = Beginning stockholders' equity + Change in stockholders' equity Change in stockholders' equity = Issuance of stock + Net income - Dividends Beginning stockholders' equity = Ending stockholders' equity - Change in stockholders' equity
Wright Company receives money from customers who have been previously billed, on account, $6,850.
INCREASE AND decrease in Individual asset accounts no change - individual liability accounts, capital stock, retained earnings
Stewart Company receives money in advance of performing the service, $6,200
Increase - individual asset accounts, individual liability accounts capital stock, retained earnings - no change
Thompson Company receives money in advance of performing the service, $7,500.
Increase - individual asset accounts, individual liability accounts no change - retained earnings, capital stock
Richardson Company issues stock to new investors, $27,000.
Increase- individual asset accounts, increase no change - individual liability accounts, retained earnings