Question

On September 1, Shawn Dahl established Whitewater Rentals, a canoe and kayak rental business. The following transactions occurred in the month of September and affected the following accounts:

Cash Accounts Payable Accounts Receivable Shawn Dahl, Capital Office Equipment Revenue Canoe and Kayak Equipment Expenses Transactions Shawn Dahl invested $45,100 in cash to open the business Paid $12,800 in cash for the purchase of kayak and canoe equipment Paid $1,100 in cash for rent expense Purchased additional kayak and canoe equipment for $3,850 on credit Received $3,950 in cash for kayak rentals Rented canoes and kayaks for $1,250 on account Purchased office equipment for $130 in cash Received $825 in cash from credit clients Shawn Dahl withdrew $1,550 in cash for personal expenses

Based on the information above, complete the following accounting equation.
ASSETS =

Liabilities =

Owners Equity =

Answer 1

we would first journalize the transactions

	No.	Account	debit	credit
	1	Cash	$45,100
		shawn Dal, capital		$45,100
		[cash increased and capital also increased]
	2	Canoe and Kayak Equipment	$12,800
		Cash		$12,800
	3	Rent expenses	$1100
		cash		$1100
		{ rent expense will be debited and cash reduced]
	4	Kayak and canoe equipment	$3,850
		account payable		$3,850
		[Bought on credit]
	5	cash	$3,950
		Revenue		$3,950
		[ rent is an income so we will credit it and cash will increase]
	6	account receivable	$1,250
		Revenue		$1,250
		[Revenue on credit will increase income and account receivable]
	7	office equipment	$130
		cash		$130
		[office equipment purchased on cash]
	8	cash	$825
		account receivable		$825
		[ cash received from debtors]
	9	Shwan Dahl, capital	$1,550
		cash		$1,550
		[ capital and cash will reduce due to withdrawal]

revenue and expenses will affect owner's equity account. revenue increase owner's equity and expense reduces owner's equity

	Asset				Liabilities	owner's equity
	cash	account receivable	office equipment	Canoe and Kayak Equipment	account payable	Shawn Dahl, Capital
1	$45,100					$45,100
2	($12,800)			$12,800
3	($1100)					($1100)
4				$3,850	$3,850
5	$3,950					$3,950
6		$1,250				$1,250
7	($130)		$130
8	$825	($825)
9	($1,550)					($1,550)
End bal.	$34,295	$425	$130	$16,650	$3,850	$47,650

equation

Assets= liabilities + shareholders equity

($34,295+425+130+$16,650) = $3,850+$47,650

$51,500=$51,500

assets = $51,500

liabilities = $3850

owner's equity = $47,650