🎯 Practical Case: Starting "TechStart Consulting"
Your Mission
You are the accountant for a new consulting business. Record all transactions, prepare financial statements, and prove the accounting equation balances. This case integrates everything from Chapter 1!
Step 1: Record the Transactions
TechStart Consulting had the following transactions in January 2025. For each transaction, identify how it affects the accounting equation.
| Date | Transaction | Assets | Liabilities | Equity |
|---|---|---|---|---|
| Jan 1 | Owner invested $50,000 cash | |||
| Jan 3 | Purchased office equipment for $15,000 cash | |||
| Jan 5 | Purchased supplies for $2,000 on account | |||
| Jan 10 | Provided consulting services for $8,000 cash | |||
| Jan 15 | Paid $1,000 to creditors |
Step 2: Calculate Final Balances
Based on the transactions above, calculate the ending balances for each account category.
Total Assets
Total Liabilities
Total Equity
Step 3: Prepare Income Statement
Calculate the net income for January 2025.
TECHSTART CONSULTING
Income Statement
For Month Ended January 31, 2025
| Revenues | ||
| Expenses | ||
| Net Income | $0 |
🎉 Congratulations!
You've completed a full accounting cycle from transactions to financial statements. This is the foundation of all accounting work!