Identify the accounting assumption or principle that is described below.

Belief that a company will remain in operation for the foreseeable future.
Indicates that personal and business recordkeeping should be separately maintained.
Only those items that can be expressed in money are included in the accounting record
Separates financial information into time periods for reporting purposes.
Measurement basis used when a reliable estimate of fair value is not available.
Dictates that companies should report all circumstances and events that make a difference to financial statement users

During 2022, Shamrock Company entered into the following transactions.

Purchased equipment for $257,561 cash.

2.Issued common stock to investors for $123,832 cash.

3.Purchased inventory of $61,634 on account.

Using the following tabular analysis, show the effect of each transaction on the accounting equation. For retained earnings, use separate columns for revenues, expenses, and dividends if necessary. (If a transaction results in a decrease in Assets, Liabilities or Stockholders’ Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)

Marin Company, a computer services company, entered into these transactions during May 2022, its first month of operations.

1.Stockholders invested $51,200 in the business in exchange for common stock of the company.

2.Purchased computers for office use (recorded as Equipment) for $38,400 from Ladd Co. on account.

3.Paid $5,120 cash for May rent on storage space.

4.Performed computer services worth $24,320 on account.

5.Performed computer services for Wharton Construction Company for $6,400 cash.

6.Paid Western States Power Co. $10,240 cash for energy usage in May.

7.Paid Ladd Co. for the computers purchased in (2).

8.Incurred advertising expense for May of $1,664 on account.

9.Received $15,360 cash from customers for contracts billed in (4).

Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to revenues or expenses in the right-hand column. (If a transaction results in a decrease in Assets, Liabilities or Stockholders’ Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset Liability or Equity item that was reduced.)

The accounts of Tamarisk Delivery Service contain the following balances on July 31, 2022

Accounts Receivable $15,812

Accounts Payable 9,912

Cash 14,651

Equipment 70,042

Maintenance and Repairs Expense 2,307

Insurance Expense 1,062

Notes Payable (due 2025) 33,571

Prepaid Insurance $2,596

Service Revenue 18,290

Dividends 826

Common Stock 47,200

Salaries and Wages Expense 8,773

Salaries and Wages Payable 960

Retained Earnings (July 1, 2022) 6,136

a) Prepare an income statement for the month of July 2022.

b) Prepare a retained earnings statement for the month of July 2022. (List items that increase retained earnings first.)

c) Prepare a classified balance sheet for the month of July 2022. (List Current Assets in order of liquidity)