Question

Hashem started a business that offers legal services on 1 December 2019. The following are transactions occurred during the month of December 2019:

1. Hashem brought in RM50,000 cash and office equipments worth RM12,000 into the business.
2. Bought a car for his own use worth RM112,000 by paying cash (company’s money) of RM12,000 and signing a note payable for the balance.
3. Provided legal services to a client worth RM7,000 and received cash of RM3,000 from the client.
4. Purchased office supplies worth RM2,000 cash.
5. Paid RM700 cash for advertising expenses for the months of December 2019.
6. Sent a bill totaling RM5,000 to a client for the legal service provided and yet to receive payment.
7. Received RM3,000 cash as an agreement to start work as a legal advisor for a company starting February 2020.
8. Paid RM3,600 cash for employees’ salary.
9. Paid RM2,400 cash for December office rental.
10. As at 31 December 2019, the office supplies used is RM400.

Based on the above information, you are required to:

Show the effects of all the above transactions in the accounting equation

Answer 1

		Assets				=	Liabilities		+	Owners Equity	+	Revenues	-	Expenses
No	Transaction	Cash	Office Equipment	Office supplies	Accounts receivable		Unearned service revenue	Notes Payable		Capital
1	Hashem brought in RM50,000 cash and office equipments worth RM12,000 into the business.	50,000	12,000							62000
2	Bought a car for his own use worth RM112,000 by paying cash (company’s money) of RM12,000 and signing a note payable for the balance.	-12000						100,000		-112,000
3	Provided legal services to a client worth RM7,000 and received cash of RM3,000 from the client.	3000			4000							7000
4	Purchased office supplies worth RM2,000 cash.	-2000		2000
5	Paid RM700 cash for advertising expenses for the months of December 2019.	-700												700
6	Sent a bill totaling RM5,000 to a client for the legal service provided and yet to receive payment.				5000							5000
7	Received RM3,000 cash as an agreement to start work as a legal advisor for a company starting February 2020.	3000					3000
8	Paid RM3,600 cash for employees’ salary.	-3600												3600
9	Paid RM2,400 cash for December office rental.	-2400												2400
10	As at 31 December 2019, the office supplies used is RM400.				-400									400
Total		35,300	12,000	2,000	8,600		3,000	100,000		-50,000		12,000		7,100