Lita Lopez started Biz Consulting, a new business, and completed the following transactions during its first year of of a. Lita Lopez invested $$ \$ 70,000 $$ cash and equipment valued at $$ \$ 10,000 $$ in the company in exchange for its common b. The company purchased a building for $$ \$ 40,000 $$ cash. c. The company purchased equipment for $$ \$ 15,000 $$ cash. d. The company purchased $$ \$ 1,200 $$ of supplies and $$ \$ 1,700 $$ of equipment on credit. e. The company paid $$ \$ 500 $$ cash for advertising expenses. f. The company completed a financial plan for a client and billed that client $$ \$ 2,800 $$ for the service. g. The company designed a financial plan for another client and immediately collected a $$ \$ 4,000 $$ cash fee. h. The company paid $$ \$ 3,275 $$ cash in dividends to the owner (sole shareholder). i. The company received $$ \$ 1,800 $$ cash as partial payment from the client described in transaction $$ f $$. j. The company made a partial payment of $$ \$ 700 $$ cash on the equipment purchased in transaction $$ d $$. k. The company paid $$ \$ 1,800 $$ cash for the secretary's wages for this period. Required: 1. Enter the amount of each.transaction on individual items of the accounting equation. 2. Determine the company's net income. complete this question by entering your answers in the tabs below.

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To solve this problem, we will follow the steps outlined in the requirements. We will first analyze each transaction and record the effects on the accounting equation (Assets = Liabilities + Equity). Then, we will calculate the company's net income.

### Step 1: Analyze Each Transaction

1. **Lita Lopez invested $$ \$ 70,000 $$ cash and equipment valued at $$ \$ 10,000 $$ in the company in exchange for its common stock.**
   - Assets: Cash $$ +70,000 $$, Equipment $$ +10,000 $$
   - Equity: Common Stock $$ +80,000 $$

2. **The company purchased a building for $$ \$ 40,000 $$ cash.**
   - Assets: Building $$ +40,000 $$, Cash $$ -40,000 $$

3. **The company purchased equipment for $$ \$ 15,000 $$ cash.**
   - Assets: Equipment $$ +15,000 $$, Cash $$ -15,000 $$

4. **The company purchased $$ \$ 1,200 $$ of supplies and $$ \$ 1,700 $$ of equipment on credit.**
   - Assets: Supplies $$ +1,200 $$, Equipment $$ +1,700 $$
   - Liabilities: Accounts Payable $$ +1,700 $$

5. **The company paid $$ \$ 500 $$ cash for advertising expenses.**
   - Assets: Cash $$ -500 $$
   - Equity: Advertising Expense $$ -500 $$

6. **The company completed a financial plan for a client and billed that client $$ \$ 2,800 $$ for the service.**
   - Assets: Accounts Receivable $$ +2,800 $$
   - Equity: Service Revenue $$ +2,800 $$

7. **The company designed a financial plan for another client and immediately collected a $$ \$ 4,000 $$ cash fee.**
   - Assets: Cash $$ +4,000 $$
   - Equity: Service Revenue $$ +4,000 $$

8. **The company paid $$ \$ 3,275 $$ cash in dividends to the owner (sole shareholder).**
   - Assets: Cash $$ -3,275 $$
   - Equity: Dividends $$ -3,275 $$

9. **The company received $$ \$ 1,800 $$ cash as partial payment from the client described in transaction $$ f $$.**
   - Assets: Cash $$ +1,800 $$
   - Assets: Accounts Receivable $$ -1,800 $$

10. **The company made a partial payment of $$ \$ 700 $$ cash on the equipment purchased in transaction $$ d $$.**
    - Assets: Cash $$ -700 $$
    - Liabilities: Accounts Payable $$ -700 $$

11. **The company paid $$ \$ 1,800 $$ cash for the secretary's wages for this period.**
    - Assets: Cash $$ -1,800 $$
    - Equity: Wages Expense $$ -1,800 $$

### Step 2: Record Each Transaction in the Accounting Equation

Now, let's summarize the effects of all transactions on the accounting equation:

- **Assets:**
  - Cash: $$ 70,000 - 40,000 - 15,000 - 500 + 4,000 - 3,275 + 1,800 - 700 - 1,800 = 15,525 $$
  - Equipment: $$ 10,000 + 15,000 + 1,700 = 26,700 $$
  - Building: $$ 40,000 $$
  - Supplies: $$ 1,200 $$
  - Accounts Receivable: $$ 2,800 - 1,800 = 1,000 $$

- **Liabilities:**
  - Accounts Payable: $$ 1,700 - 700 = 1,000 $$

- **Equity:**
  - Common Stock: $$ 80,000 $$
  - Service Revenue: $$ 2,800 + 4,000 = 6,800 $$
  - Advertising Expense: $$ -500 $$
  - Wages Expense: $$ -1,800 $$
  - Dividends: $$ -3,275 $$

### Step 3: Calculate Net Income

Net Income can be calculated as follows:

$$
\text{Net Income} = \text{Total Revenues} - \text{Total Expenses}
$$

Where:
- Total Revenues = Service Revenue = $$ 6,800 $$
- Total Expenses = Advertising Expense + Wages Expense = $$ 500 + 1,800 = 2,300 $$

Now, we can calculate the net income:

$$
\text{Net Income} = 6,800 - 2,300 = 4,500
$$

### Summary of Results

1. **Assets:**
   - Cash: $$ 15,525 $$
   - Equipment: $$ 26,700 $$
   - Building: $$ 40,000 $$
   - Supplies: $$ 1,200 $$
   - Accounts Receivable: $$ 1,000 $$

2. **Liabilities:**
   - Accounts Payable: $$ 1,000 $$

3. **Equity:**
   - Common Stock: $$ 80,000 $$
   - Retained Earnings (Net Income - Dividends): $$ 4,500 - 3,275 = 1,225 $$

4. **Net Income:**
   - $$ 4,500 $$

This concludes the analysis of Lita Lopez's transactions for the first year of Biz Consulting.
**Assets:** - Cash: \$15,525 - Equipment: \$26,700 - Building: \$40,000 - Supplies: \$1,200 - Accounts Receivable: \$1,000 **Liabilities:** - Accounts Payable: \$1,000 **Equity:** - Common Stock: \$80,000 - Retained Earnings: \$1,225 **Net Income:** - \$4,500

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