Analyze the impact of business Transaction on Accounts Gloria Varay opened Medical practice. the Business completed The Following Transactions 1) Varay Invested $29,000 Cash to Start Her Medical Practice. The Business issued Common Stock To Varay 2) Purchased Medical Supplies On Account totaling $9,200 3) Paid Monthly Office Rent of $4,000 4) Recorded $7,000 Revenue (in Cash) For Service Rendered To Patients
To analyze the impact of these business transactions on accounts, we need to understand the basic accounting equation: Assets = Liabilities + Owner's Equity.
1) Varay Invested $29,000 Cash to Start Her Medical Practice. The Business issued Common Stock to Varay:
This transaction increases both the cash (asset) account and the common stock (equity) account. You would record these transactions as follows:
- Increase the cash account by $29,000.
- Increase the common stock account by $29,000.
2) Purchased Medical Supplies on Account totaling $9,200:
This transaction increases the medical supplies (asset) account and creates a liability with the supplier (accounts payable). You would record this transaction as follows:
- Increase the medical supplies account by $9,200.
- Increase the accounts payable account by $9,200.
3) Paid Monthly Office Rent of $4,000:
This transaction decreases the cash (asset) account and the office rent expense (expense) account. You would record this transaction as follows:
- Decrease the cash account by $4,000.
- Increase the office rent expense account by $4,000.
4) Recorded $7,000 Revenue (in Cash) for Services Rendered to Patients:
This transaction increases the cash (asset) account and the service revenue (equity) account. You would record this transaction as follows:
- Increase the cash account by $7,000.
- Increase the service revenue account by $7,000.
After analyzing these transactions and recording them in the respective accounts, you would need to summarize the changes in each account to determine the overall impact on the financial position of the medical practice. For example, by calculating the total assets, liabilities, and owner's equity at the end of the transactions.