Question

Prepare an extended accounting equation from the below mentioned information:

• On November 1, 2012, Chris Clark deposits AED25,000 in a bank account in the name of Net Solutions.
• On November 5, 2012, Net Solutions agreed to pay AED20,000 for the purchase of land as a future building site.
• On November 10, 2012, Net Solutions purchased inventory for AED1,350 and agreed to pay the supplier in the near future.
• On November 18, 2012, Net Solutions received cash of AED7,500 for providing services to customers.
• On November 30, 2012, Net Solutions paid the following expenses during the month: wages, AED2,125; rent, AED800; utilities, AED450.
• On November 30, 2012, Net Solutions paid creditors on account, AED950.

Typed Please or good handwriting because I have big problem in reading hand writing

Answer 1

Expended Accounting Equation for sole proprietorship =,

Assets= Liabilities+Owners capital+ Revenue-Expenses-Owner's Drawing

Date	Transaction	Assets	Liabilities	Owner's capital	Revenue	Expenses	Owners drawing
November 1, 2012	Chris Clark deposits AED25,000 in a bank account in the name of Net Solutions	25000		25000
November 5, 2012	Net Solutions agreed to pay AED20,000 for the purchase of land as a future building site.
	(No effect -See Note)
November 10, 2012	Net Solutions purchased inventory for AED1,350 and agreed to pay the supplier in the near future	1350	1350
	(Inventory Purchased but payment not made)
November 18, 2012	Net Solutions received cash of AED7,500 for providing services to customers	7500			7500
November 30, 2012	Net Solutions paid the following expenses during the month: wages, AED2,125; rent, AED800; utilities, AED450	-3375				3375
November 30, 2012	Net Solutions paid creditors on account, AED950.	-950	-950
	Total	29525	400	25000	7500	3375	0

Note- On Nov 5 , Net Solutions has only agreed to pay AED 20000 for the purchase of land as a future building site. But no payment has been made and no land has been purchased.hence no effect on asset and liability.

Hence

Expended Accounting equation will be,

29525= 400+25000+7500-3375-0