Question

After several month of planning, Sally started a haircutting business called Barber Hipster. The following events occurred during its first month:
a.   On 1 Jan, Sally invested RM3,000 cash and RM15,000 of equipment in Barber Hipster.
b.   On 2 Jan, Barber Hipster paid RM600 cash for furniture for the shop.
c.   On 3 Jan, Barber Hipster paid RM500 cash to rent space in a mall for January
d.   On 4 Jan, it purchased RM1,200 of equipment on credit for the shop (using a long-term note payable)
e.   On 5 Jan, Barber Hipster opened for business. Cash received from services provided in the first week and a half of business (ended 15 Jan) is RM825.
f.   On 15 Jan, it provided RM100 of haircutting services on account
g.   On 17 Jan, it received a RM100 check for services previously rendered on account
h.   On 17 Jan, it paid RM125 cash to an assistant for working during grand opening.
i.   Cash received from services provided during the second half of January is RM930
j.   On 31 Jan, it paid a RM400 installment toward principal on the note payable entered into on 4 Jan.
k.   On 31 Jan, Sally made a RM900 cash withdrawal for personal use.

Required:  
Show the effects of each transaction using the accounting equation.

Answer 1

Accounting equation in the books of Barner hipster

For the month of January.

Dare	Capital+	Liabilities=	Assets
		Long term notes payable	Cash	Equipment	Furniture	Accounts receivable
Jan1 Invested jn cash and equipment	18000	-	3000	15000	-	-
Jan2 Furniture bought with cash	-	-	(600)	-	600	-
Jan3 Rent paid in cash	(500)	-	(500)	-	-	-
Jan4 Purchased equipment with note payable	-	1200	-	1200	-	-
Jan5 Revenue received for first half a month	825	-	825	-	-	-
Jan15 Service provided on credit/account	100	-	-	-	-	100
Jan17 Amount recieved for credit services	-	-	100	-	-	(100)
Jan17 Cash paid to assistant	(125)	-	(125)	-	-	-
Jan31 Cash received for service provided in the second half of the month	930	-	930	-	-	-
Jan31 Installment paid for notes payable	-	(400)	(400)	-	-	-
Jan31 Cash withdrawn for personal use	(900)	-	(900)	-	-	-
Toral	18330	800	2330	16200	600	0

Capital+liabilities = Assets

18330+800=2330+16200+600+0