Question

In: Accounting

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
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.

Solutions

Expert Solution

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.


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