Question

Q.1 Using Accounting Equation analyze, and pass journal entries of all belowtransactions in the books of Alnaeem Company,thenprepare balance sheet on the basis of your assumptions

1. Alnaeem start business with investment of cash assume amount yourself and put in equation and pass journal entry.
2. Alnaeem purchase furniture with cash assume amount yourself and put in equation and pass journal entry.
3. Alnaeem purchase Goods with cash assume amount yourself and put in equation and pass journal entry.
4. Alnaeem purchase Equipment on Account assume amount yourself and put in equation and pass journal entry.
5. Alnaeem receive consulting fees Cash assume amount yourself and put in equation and pass journal entry.

Answer 1

• Accounting Equation : ASSETS = LIABILITIES + EQUITY
• Journal Entries & Accounting Equation

No.	Accounts title	Debit	Credit	ASSETS                        =		LIABILITIES             +		EQUITY
1	Cash	$100,000		Cash	$100,000			Capital Stock	$100,000
	Capital Stock		$100,000
	(Amount invested in business)

No.	Accounts tiltle	Debit	Credit	ASSETS		=	LIABILITIES		+	EQUITY
2	Furniture	$30,000		Furniture	$30,000	=			+
	Cash		$30,000
	(Furniture purchased)			Cash	($30,000)	=			+

No.	Accounts tiltle	Debit	Credit	ASSETS		=	LIABILITIES		+	EQUITY
3	Merchandise Inventory	$20,000		Merchandise Inventory	$20,000	=			+
	Cash		$20,000
	(Inventory purchased )			Cash	($20,000)	=			+

No.	Accounts title	Debit	Credit	ASSETS		=	LIABILITIES		+	EQUITY
4	Equipment	$50,000		Cash	$50,000	=	Accounts Payable	$50,000	+
	Accounts Payable		$50,000
	(Equipment purchased on account)

No.	Accounts title	Debit	Credit	ASSETS		=	LIABILITIES		+	EQUITY
5	Cash	$15,000		Cash	$15,000	=			+	Consulting Fees revenue	$15,000
	Consulting Fees revenue		$15,000
	(revenue earned in Cash)

• Balance Sheet

Balance Sheet
ASSETS
Cash	$65,000
Merchandise Inventory	$20,000
Furniture	$30,000
Equipment	$50,000
Total Assets	$165,000
LIABILITIES
Accounts Payable	$50,000
OWNER's EQUITY
Capital Stock [including Net Income revenue]	$115,000
Total Liabilities & Equity	$165,000