Financial or Accounting

1) Beckowsik Company began business in June and completed the following transactions:

A)    Received $50,000 cash and issued common stock to the stockholders.

B)    Purchased supplies for $5,000 on account.

C)    Received and paid utilities bill of $2,000 for the month.

D)    Performed services for a customer and billed the customer $6,000.

E)    Received $3,000 from the customer on account.

F)    Paid for the supplies purchased on account.

G)    Purchased equipment for $10,000 on account.

H)    Declared and paid dividends of $2,200.

Required:

1. Record the effects of the above transactions on the accounting equation.

2. Prove the accounting equation using the final balances in the accounts

Accounting equation:

Accounting equation depicts that all the financial transaction has impact over 2 or more than 2 accounts. This accounting equation depict that all the assets of a company are either bought by the company on cash or borrowing money (Noreen, Brewer & Crawford, 2011). Thus the accounting equation of the finance is:

Accounting Equation = Assets - Liabilities = capital

The above discussed equation has been analyzed over the above given calculation to analyze that whether the above recorded transaction are correct or not. For analyzing it, all the assets have been added and subtracted from liabilities which would be equal to the total capital of the company.  

In the given case, the total assets are = 43800+5000+3000+10000

Whereas the total liabilities = 10000

And, the total capital of the company = 51800

If the following information is putted into the accounting equation than,

Accounting Equation = Assets - Liabilities = capital

So, =43800+5000+3000+10000-10000 = 50000+1800

51800=51800 (Garrison et al, 2010)

It proves that the total assets and liabilities are equal to the capital of the company and thus it has been proved that the financial transaction has been recorded in a good manner by the accountant and in a correct way.

Que 2)

The following information depicts about the transaction and the account which would be impacted through this transaction and the financial statement has also been analyzed according to that.