Question

Exercise 1

The following are transactions for Sameer new business during the month of September; we are going to see their effect on the basic accounting equation:

1. Sameer invested $15000 cash in the business       
2. Purchase of equipment of $7000 on credit .         
3. Purchase of supplies on credit of $1600.  
4. Provide services (revenues) of cash $1200.                   
5. Purchase of advertising on credit of $250.    
6. Provide services of $3500, cash $2000 and $1500 billed on account (account receivable)
7. Payment of expenses of cash $1700.
8. Payment of accounts payable of $250.
9. Receipt of cash from customers on account of $600.
10. Withdrawal of cash by owner of $1300.

Instructions:

A: Prepare a tabular analysis for the previous transactions.

B:Prepare Financial Statements

Answer 1

ASSETS	=	Liabilitiies + Equity+ Net Income
Cash	+	Accts. Rece	+	Supplies	+	Equip	=	Accts.Pay	+	Capital	-	Drawings	+	Revenues	-	Expense
15000										15000
						7000		7000
				1600				1600
1200														1200
								250							-	-250
2000		1500												3500
-1700															-	-1700
-250							-	-250
600		-600
-1300												-1300
15550		900		1600		7000		8600		15000		-1300		4700		-1950

Cash Asset Increase	Capital Liability Increase
Equipment Asset Increase	Accounts Payable Liability Increase
Supplies Asset Increase	Accounts Payable Liability Increase
Cash Asset Increase	Service income revenue increase make a increase in retained earnings
Advertising Expense Increase make a decrease in retained earnings	Accounts Payable Liability Increase
Cash , Accounts Receivable Asset increase	Service income revenue increase
Expense Increase make a decrease in retained earnings	Cash Asset Decrease
Accounts Payable Decrease	Cash Asset Decrease
Cash Asset Increase	Accounts Receivable Asset decrease
Drawings Asset Increase	Cash Asset Decrease

Income Statement
Income
Service Revenue	4700	4700
Expenses
Advertising Expense	250
Expenses	1700	1950
Net Income		2750

BALANCE SHEET
ASSETS
Current Assets
Cash	15550
Accounts Receivable	900
Supplies	1600
Equipment	7000
TOTAL ASSETS	25050
LIABILITIES
Accounts Payable	8600
Capital	15000
Less Drawings	(-1300)
Add Net Income	2750
TOTAL LIABILITIES	25050