Problem 3-6A: Applying the Accounting Equation
The following transactions occurred during the company's first month:
1. The company purchased $1,000 of office supplies for cash.
2. The company paid $1,600 cash for two weeks' salaries earned by employees.
3. The company paid $350 cash for minor repairs to the company's computer.
The company's chart of accounts follows:
101 Cash
106 Accounts Receivable
124 Office Supplies
128 Prepaid Insurance
167 Computer Equipment
168 Accumulated Depreciation - Computer Equipment
209 Salaries Payable
307 Common Stock
318 Retained Earnings
319 Dividends
405 Revenues Earned
612 Depreciation Expense - Computer Equipment
622 Salaries Expense
637 Insurance Expense
640 Rent Expense
650 Office Supplies Expense
684 Repairs Expense
690 Telephone Expense
999 Income Summary
Required:
Net Income: $21,977
Total Assets: $51,617
Total Liabilities: $10,558
Equity: $41,059
