Question

In: Accounting

On July 1, Tommy Wrigley established Wrigley Home Appraisal Services, a firm that provides expert residential...

On July 1, Tommy Wrigley established Wrigley Home Appraisal Services, a firm that provides expert residential appraisals and represents clients in home appraisal hearings.

TRANSACTIONS

The owner invested $97,000 in cash to begin the business.

Paid $19,750 in cash for the purchase of equipment.

Purchased additional equipment for $14,400 on credit.

Paid $11,800 in cash to creditors.

The owner made an additional investment of $30,000 in cash.

Performed services for $8,200 in cash.

Performed services for $6,300 on account.

Paid $4,000 for rent expense.

Received $3,500 in cash from credit clients.

Paid $6,460 in cash for office supplies.

The owner withdrew $9,000 in cash for personal expenses.


Record in equation form the changes that occur in assets, liabilities, and owner’s equity for the above transactions.

Analyze:
What is the ending balance of cash after all transactions have been recorded?

Solutions

Expert Solution

Basic Accounting Equation is, Assets= Liabilities and Owner's Equity

Recording of Transactions in Equation form to know the changes in Assets, Liabilities and Owner's Equity:-

Wrigley Home Appraisal Services

Transaction Analysis

For the Month of July

No. Assets = Liabilities + Owner's Equity
Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Owner's Capital - Owner's Drawings + Service Revenue - Expense
1. $97,000 + + + = + $97,000 - + -
2. (19,750) + + + $19,750 = + - + -
3. + + + 14,400 = $14,400 + - + -
4. (11,800) + + + = (11,800) + - + -
5. 30,000 + + + = + 30,000 - + -
6. 8,200 + + + = + - + $8,200 -
7. + $6,300 + + = + - + 6,300 -
8. (4,000) + + + = + - + - 4,000
9. 3,500 + (3,500) + + = + - + -
10. (6,460) + + $6,460 + = + - + -
11. (9,000) + + + = + - $9,000 + -
Bal. $87,690 + $2,800 + $6,460 + $34,150 = $2,600 + $127,000 - $9,000 + $14,500 - $4,000

The Ending Balance of Cash after all transactions have been recorded is $87,690.


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