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

  1. The owner invested $91,000 in cash to begin the business.
  2. Paid $18,550 in cash for the purchase of equipment.
  3. Purchased additional equipment for $14,800 on credit.
  4. Paid $10,600 in cash to creditors.
  5. The owner made an additional investment of $24,000 in cash.
  6. Performed services for $7,000 in cash.
  7. Performed services for $6,700 on the account.
  8. Paid $2,800 for rent expense.
  9. Received $2,300 in cash from credit clients.
  10. Paid $5,260 in cash for office supplies.
  11. The owner withdrew $7,800 in cash for personal expenses

Record in equation forms 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?

Assets = Liabilities + Owner's Equity
Transactions Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Owner's Capital
1. + + + = +
2. + + + = +
3. + + + = +
4. + + + = +
5. + + + = +
6. + + + = +
7. + + + = +
8. + + + = +
9. + + + = +
10. + + + = +
11. + + + = +
Totals $0 + $0 + $0 + $0 = $0 + $0

Solutions

Expert Solution

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Tommy Wrigley Asset = Liabilities Owner's Equity
Transactions Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Owner's Capital
1       91,000.00 + + + = +            91,000.00
2      (18,550.00) + + +     18,550.00 = +
3 + + +     14,800.00 =     14,800.00 +
4      (10,600.00) + + + = (10,600.00) +
5       24,000.00 + + + = +            24,000.00
6         7,000.00 + + + = +              7,000.00
7 +                        6,700.00 + + = +              6,700.00
8        (2,800.00) + + + = +            (2,800.00)
9         2,300.00 +                      (2,300.00) + + = +
10        (5,260.00) + +        5,260.00 + = +
11        (7,800.00) + + + = +            (7,800.00)
Total       79,290.00                       4,400.00        5,260.00     33,350.00       4,200.00         118,100.00
The ending balance of cash after all transactions have been recorded is $ 79,290.

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