Windsor, Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis. Aug. 1 Opens an office as a financial advisor, investing $4,100 in cash in exchange for common stock. 4 Pays insurance in advance for 6 months, $1,850 cash. 16 Receives $400 from clients for services performed. 27 Pays secretary $1,760 salary.

Question

Business

Markus Jennings

7 April, 17:33

Windsor, Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis. Aug. 1 Opens an office as a financial advisor, investing $4,100 in cash in exchange for common stock. 4 Pays insurance in advance for 6 months, $1,850 cash. 16 Receives $400 from clients for services performed. 27 Pays secretary $1,760 salary.

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Answers (1)

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Jenna Underwood · Answer 1

a) the accounting equations keeps equals

b) in the explanation at the bottom

Explanation:

Agu 1.

a) the effect on the accounting equation

1. Opens an office as a financial advisor, investing $4,100 in cash in exchange for common stock.

the asset keeps the same

Pays insurance in advance for 6 months, $1,850 cash

the asset keeps the same

Receives $400 from clients for services performed

the asset increase because the cash increase + $400 and the accounts receivable decreased

Pays secretary $1,760 salary.

The cash decrease because paid - $1,760 and the account of the salaries to pay decrease - $1.760

b) the debit-credit analysis

debit credit

Cash - $4.100 assets account

investing + 4100 assets account

Cash - $1.850 assets account

Pays insurance + 1.850 assets account

Cash + 400 assets account

Acc receivable - 400 assets account

cash - 1.760 assets account

wages to pay - 1.760 liabilities account