Analyze Each of the Following Transactions in Terms of Their

question 180

Essay

Analyze each of the following transactions in terms of their effects on the accounting equation of Hawkins Delivery Service. Enter the correct amounts in the columns of the spreadsheet.
a) The owner, James Hawkins contributes $75,000 to form the business.
b) The business purchases $750 of office supplies on account.
c) The business pays cash to purchase a delivery van for $25,000.
d) Services are performed for clients and $5,000 cash is received.
e) Cash is paid for office rent expense, $800 and utilities expense, $400.
f) The owner withdrew $1,000 from the company.

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Definitions:

Trading Securities Portfolio

A collection of securities bought and held primarily for sale in the short term to generate income on short-term price differences.

Fair Value

The estimated price at which an asset can be bought or sold in an orderly transaction between market participants at the valuation date.

Unrealized Gain

An increase in the value of an asset that has not been sold, thus not yet generating actual profit.

Readily Marketable

Items or securities that are readily marketable can be quickly sold in the market without significantly affecting their price.