Question

Sanyu Sony started a new business and completed these transactions during December.

Dec. 1 Sanyu Sony transferred \(65000 cash from a personal savings account to a checking account in the name of Sony Electric in exchange for its common stock.

2 The company rented office space and paid \)1000 cash for the December rent.

3 The company purchased \(13000 of electrical equipment by paying \)4800 cash and agreeing to pay the \(8200 balance in 30 days.

5 The company purchased office supplies by paying \)800 cash.

6 The company completed electrical work and immediately collected \(1200 cash for these services.

8 The company purchased \)2530 of office equipment on credit.

15 The company completed electrical work on credit in the amount of \(5000.

18 The company purchased \)350 of office supplies on credit.

20 The company paid \(2530 cash for the office equipment purchased on December 8.

24 The company billed a client \)900 for electrical work completed; the balance is due in 30 days.

28 The company received \(5000 cash for the work completed on December 15.

29 The company paid the assistant’s salary of \)1400 cash for this month.

30 The company paid \(540 cash for this month’s utility bill.

31 The company paid \)950 cash in dividends to the owner (sole shareholder).

Required 1. Create the following table similar to the one in Exhibit 1.9

Short answer

Dividends are the profits distributed to the shareholders and an accounting equation is prepared. The total asset is equal to the total of liabilities and equity that is $76,760.

Step-by-step solution

Definition of dividends

The dividends are defined as the part of profits that are distributed among the owner or the shareholder of the company.

Preparation of Accounting equation

	Assets					=	Liabilities+	Equity
Date	Cash ($)	AR ($)	Office	Off	Elect		Accounts	Common	-Div	Rev	-Exp
			Supplies ($)	Equip ($)	Equip ($)		Payable ($)	Stock ($)	($)	($)	($)
Dec
1	65,000							65,000
Bal	65,000							65,000
2	-1,000										-1,000
Bal	64,000							65,000			-1,000
3	-4,800				13,000		8,200
Bal	59,200				13,000		8,200	65,000			-1,000
5	-800		800
Bal	58,400		800		13,000		8,200	65,000			-1,000
6	1,200									1,200
Bal	59,600		800		13,000		8,200	65,000		1,200	-1,000
8				2,530			2,530
Bal	59,600		800	2,530	13,000		10,730	65,000		1,200	-1,000
15		5,000								5,000
Bal	59,600	5,000	800	2,530	13,000		10,730	65,000		6,200	-1,000
18			350				350
Bal	5,9600	5,000	1,150	2,530	13,000		11,080	65,000		6,200	-1,000
20	-2,530						-2,530
Bal	57,070	5,000	1,150	2,530	13,000		8,550	65,000		6,200	-1,000
24		900								900
Bal	57,070	5,900	1,150	2,530	13,000		8,550	65,000		7,100	-1,000
28	5,000	-5,000
Bal	62,070	900	1,150	2,530	13,000		8,550	65,000		7,100	-1,000
29	-1,400										-1,400
Bal	60,670	900	1,150	2,530	13,000		8,550	65,000		7,100	-2,400
30	-540										-540
Bal	60,130	900	1,150	2,530	13,000		8,550	65,000		7,100	-2,940
31	-950								-950
Bal	59,180	900	1,150	2,530	13,000		8,550	65,000	-950	7,100	-2,940
Total	59,180	900	1,150	2,530	13,000		8,550	65,000	-950	7,100	-2,940