In: Accounting
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 | ||||||||||||
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. |
Answer
Tran. No. | Assets | = | Liabilities | + | Owner’s Equity | |||||||
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.