{"id":218076,"date":"2025-05-23T07:28:12","date_gmt":"2025-05-23T07:28:12","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=218076"},"modified":"2025-05-23T07:28:14","modified_gmt":"2025-05-23T07:28:14","slug":"during-march-the-following-transactions-were-completed","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/05\/23\/during-march-the-following-transactions-were-completed\/","title":{"rendered":"During March, the following transactions were completed."},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Zoe Parker opened Fresh Step Carpet Cleaners, Ltd. on March 1. During March, the following transactions were completed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Mar. 1 Shareholders invested \u00a314,000 cash in the business in exchange for ordinary shares.<br>1 Purchased used truck for \u00a310,000, paying \u00a33,000 cash and the balance on account.<br>3 Purchased cleaning supplies for \u00a31,200 on account.<br>5 Paid \u00a31,800 cash on one-year insurance policy effective March 1.<br>14 Billed customers \u00a34,500 for cleaning services performed.<br>18 Paid \u00a31,500 cash on amount owed on truck and \u00a3500 on amount owed on cleaning supplies.<br>Mar. 20 Paid \u00a31,800 cash for employee salaries.<br>21 Collected \u00a31,600 cash from customers billed on March 14.<br>28 Billed customers \u00a32,500 for cleaning services performed.<br>31 Paid \u00a3320 for the monthly gasoline bill for the truck.<br>31 Declared and paid \u00a3800 cash dividends.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-0-color\">The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To analyze the financial impact of these transactions, we will record each event and understand its effect on the accounting equation:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Accounting Equation:<\/strong><br><strong>Assets = Liabilities + Shareholders\u2019 Equity<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s go through the <strong>transactions<\/strong>:<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. March 1: Shareholder investment of \u00a314,000 in cash<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Cash)<\/strong> increase by \u00a314,000<\/li>\n\n\n\n<li><strong>Equity (Common Stock)<\/strong> increases by \u00a314,000<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. March 1: Purchase of a truck for \u00a310,000<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Paid \u00a33,000 cash, remaining \u00a37,000 on account<\/li>\n\n\n\n<li><strong>Assets (Truck)<\/strong> increase by \u00a310,000<\/li>\n\n\n\n<li><strong>Assets (Cash)<\/strong> decrease by \u00a33,000<\/li>\n\n\n\n<li><strong>Liabilities (Accounts Payable)<\/strong> increase by \u00a37,000<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. March 3: Purchased cleaning supplies on account for \u00a31,200<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Supplies)<\/strong> increase by \u00a31,200<\/li>\n\n\n\n<li><strong>Liabilities (Accounts Payable)<\/strong> increase by \u00a31,200<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. March 5: Paid \u00a31,800 for a one-year insurance policy<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Prepaid Insurance)<\/strong> increase by \u00a31,800<\/li>\n\n\n\n<li><strong>Assets (Cash)<\/strong> decrease by \u00a31,800<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. March 14: Billed customers \u00a34,500 for cleaning services<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Accounts Receivable)<\/strong> increase by \u00a34,500<\/li>\n\n\n\n<li><strong>Revenue (Service Revenue)<\/strong> increases, contributing to <strong>Equity<\/strong><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>6. March 18: Paid \u00a31,500 toward truck and \u00a3500 toward supplies<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Cash)<\/strong> decrease by \u00a32,000<\/li>\n\n\n\n<li><strong>Liabilities (Accounts Payable)<\/strong> decrease by \u00a32,000<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>7. March 20: Paid salaries of \u00a31,800<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Cash)<\/strong> decrease by \u00a31,800<\/li>\n\n\n\n<li><strong>Expenses (Salaries Expense)<\/strong> increase, reducing <strong>Equity<\/strong><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>8. March 21: Collected \u00a31,600 from customers<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Cash)<\/strong> increase by \u00a31,600<\/li>\n\n\n\n<li><strong>Assets (Accounts Receivable)<\/strong> decrease by \u00a31,600<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>9. March 28: Billed customers \u00a32,500 for cleaning services<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Accounts Receivable)<\/strong> increase by \u00a32,500<\/li>\n\n\n\n<li><strong>Revenue (Service Revenue)<\/strong> increases, contributing to <strong>Equity<\/strong><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>10. March 31: Paid \u00a3320 for truck gasoline<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Cash)<\/strong> decrease by \u00a3320<\/li>\n\n\n\n<li><strong>Expenses (Gasoline Expense)<\/strong> increase, reducing <strong>Equity<\/strong><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>11. March 31: Paid \u00a3800 cash dividends<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets (Cash)<\/strong> decrease by \u00a3800<\/li>\n\n\n\n<li><strong>Equity (Dividends)<\/strong> increases, which reduces <strong>Retained Earnings<\/strong><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Summary<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">These entries follow <strong>double-entry accounting<\/strong>, affecting at least two accounts per transaction. Over March, Fresh Step Carpet Cleaners:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Invested and used cash for assets (truck, supplies, insurance)<\/li>\n\n\n\n<li>Earned revenue through cleaning services<\/li>\n\n\n\n<li>Incurred expenses and paid salaries<\/li>\n\n\n\n<li>Made partial repayments of liabilities<\/li>\n\n\n\n<li>Collected some accounts receivable<\/li>\n\n\n\n<li>Paid dividends to shareholders<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/learnexams.com\/blog\/wp-content\/uploads\/2025\/05\/image-136.png\" alt=\"\" class=\"wp-image-218077\"\/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Zoe Parker opened Fresh Step Carpet Cleaners, Ltd. on March 1. During March, the following transactions were completed. Mar. 1 Shareholders invested \u00a314,000 cash in the business in exchange for ordinary shares.1 Purchased used truck for \u00a310,000, paying \u00a33,000 cash and the balance on account.3 Purchased cleaning supplies for \u00a31,200 on account.5 Paid \u00a31,800 cash [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-218076","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/218076","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=218076"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/218076\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=218076"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=218076"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=218076"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}