The Transactions Listed Below Apply to Bates Company for Its

question 125

Essay

The transactions listed below apply to Bates Company for its first year in business. Assume that all transactions involve the receipt or payment of cash.Transactions for Year 1:Issued common stock to investors for $25,000 cashBorrowed $18,000 from the local bankProvided services to customers for $28,000 cashPaid expenses amounting to $21,400Purchased a plot of land for $22,000 cashPaid a dividend of $15,000 to its stockholdersRepaid $12,000 of the loan listed in number 2
Required:Fill in the headings to the accounting equation shown below.Show the effects of the above transactions on the accounting equation.________ = ________ + ________Event Number

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Definitions:

Spot Checks

Random inspections or audits conducted without prior notice to ensure compliance or verify the quality of ongoing activities.

Quality

How well a product or service fulfills or goes beyond what customers anticipate.

Agency Costs

The costs associated with resolving conflicts of interest between principals and agents, including monitoring and incentive expenses.

Principals

Individuals or entities that authorize agents to act on their behalf in business transactions.