Transactions 1. Paid cash for rent, $400.00. 2. Owner withdrew equity in the form of cash,...

Transactions
1.	Paid cash for rent, $400.00.
2.	Owner withdrew equity in the form of cash, $150.00.
3.	Received cash from sales, $900.00.
4.	Paid cash for camera repairs, $100.00.
5.	Sold services on account to Eden Wedding Planners, $400.00.
6.	Received cash from sales, $650.00.
7.	Paid cash for charitable contributions, $35.00.
8.	Received cash on account from Eden Wedding Planners, $300.00.

Shannon O’Bryan operates a service business called Edgecliff Photography. Edgecliff Photography uses the accounts shown in the following accounting equation. Transaction 1 is given as an example. For each transaction, complete the following: (a) Analyze the transaction to determine which accounts in the accounting equation are affected. (b) In the appropriate columns, enter a plus sign (+) if the account increases or a minus sign (–) if the account decreases, and then enter the amount. (c) For transactions that change owner’s equity, enter a description (revenue, expense, investment, or withdrawal) of the transaction to the right of the amount. (d) Calculate and enter a new balance for each account in the accounting equation. (e) Before going on to the next transaction, determine that the accounting equation is still in balance.

Tran. No.	Assets							=	Liabilities	+	Owner’s Equity
Tran. No.	Cash	+	Accounts Receivable-Eden Wedding Planners	+	Supplies	+	Prepaid Insurance	=	Accounts Payable-Shutter Supplies	+	Shannon O’Bryan, Capital
Beg. Bal.	725		0		200		300		200		1,025
1	-400										-400	(expense)
New Bal.	325		0		200		300		200		625
2
New Bal.
3
New Bal.
4
New Bal.
5
New Bal.
6
New Bal.
7
New Bal.
8
New Bal.

Expert Solution

Answer

Tran. No.	Assets							=	Liabilities	+	Owner’s Equity
Tran. No.	Cash	+	Accounts Receivable-Eden Wedding Planners	+	Supplies	+	Prepaid Insurance	=	Accounts Payable-Shutter Supplies	+	Shannon O’Bryan, Capital
Beg. Bal.	725		0		200		300		200		1025
1	-400									-	-400	(expense)
New Bal.	325		0		200		300		200		625
2	-150									-	-150	(withdrawal)
New Bal.	175		0		200		300		200		475
3	900									+	900	(revenue)
New Bal.	1075		0		200		300		200		1375
4	-100										-100	(expense)
New Bal.	975		0		200		300		200		1275
5			400								400	(revenue)
New Bal.	975		400		200		300		200		1675
6	650										650	(revenue)
New Bal.	1625		400		200		300		200		2325
7	-35										-35	(expense)
New Bal.	1590		400		200		300		200		2290
8	300		-300
New Bal.	1890		100		200		300		200		2290

In case of any doubt, please comment.

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