The Figure Below Shows the Transactions for Sawyer Architecture Services

question 17

Essay

The figure below shows the transactions for Sawyer Architecture Services during June. Greg Sawyer opened this business on June 1 with a capital investment of $72,000 (Transaction 1). $\begin{array}{|c|c|c|c|c|c|c|c|c|c|}\hline \text { Trans } & & \text { Assets } & & = & \text { Liab. } & &&{\text { Owner's Equity }} \\\hline & \text { Cash } & \text { Accts } & \text { Supp } & \text { Equip } & \text { Accts } & & \text { G. Sawyer, } & \text { Rev. } & \text { Expense } \\\hline & & \text { Rec } & & & \text { Pay } & & \text { Capital } & & \\\hline\\\hline 1 & +72,000 & & &&&&+72,000 \\\hline 2 & -8,200 & & & +8,200 \\\hline 3 & & 5,200 & & &&&&+5,200 \\\hline 4 & & & & +3,680 & +3,680 \\\hline 5 & -3,500 & &&&&& & &-3,500 \\\hline 6 & +670 & -670 & & & \\\hline 7 & -2,400 & & & &&&-,400 \\\hline 8 & -450 & & +450 & & \\\hline \text { Bal } & 58,120+ & 4,530+ & 450+ & 11,880= & 3,680 & + & 69,600+ & 5,200+ & -3,500 \\\hline\end{array}$
-Prepare a Balance Sheet for Cullen Consulting Services as of April 1, 2013, before he conducts any services.

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Definitions:

Breach of Contract

The failure to perform any term of a contract, agreement, or settlement without a legitimate legal excuse.

Privity of Contract

The relationship between parties in a contract that allows them to sue each other but prevents any third party from doing so.

Novation

The act of replacing an existing contract with a new one, wherein all parties agree to make the switch.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount to secure immediate capital.