Alex Shore practiced accounting with a partnership for five years

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P1-31A Applying the entity concept, using the accounting equation for
transaction analysis, and preparing financial statements [20–30 min]

Alex Shore practiced accounting with a partnership for five years. Recently he
opened his own accounting firm, which he operates as a professional corporation.
The name of the new entity is Alex Shore, CPA, P.C. Shore experienced the following events during the organizing phase of the new business and its first month of operations.
Some of the events were personal and did not affect the business.

4-Feb Shore received $27,000 cash from former accounting partners.*

5 Deposited $50,000 in a new business bank account titled Alex Shore,
CPA, P.C. The business issued common stock to Shore.

6 Paid $100 cash for letterhead stationery for the new office.

7 Purchased office furniture for the office. The business will pay the account
payable, $9,700, within three months.

10 Shore sold personal investment in Amazing.com stock, which he had owned
for several years, receiving $50,000 cash.*

11 Shore deposited the $50,000 cash from sale of the Amazing.com stock in his
personal bank account.*

12 A representative of a large company telephoned Shore and told him of the

18 company’s intention to transfer its accounting business to Shore.
Finished tax hearings on behalf of a client and submitted a bill for
accounting services, $17,000. Shore expected to collect from this client within
two weeks.

25 Paid office rent, $1,500.

28 Paid cash dividends of $1,000.

Requirements

1. Analyze the effects of the events on the accounting equation of the corporation
of Alex Shore, CPA, P.C. Use a format similar to Exhibit 1-6.

2. As of February 28, compute Alex Shore’s
a. total assets.
b. total liabilities.
c. total stockholders’ equity.
d. net income or net loss for February.