Ch2 Prob9B Std Test File 2
Problem 2-9B NAME: Chandra Bruner
Assets
=
Liabilities
+
Owner’s Equity
(Items Owned)
(Amts. Owed)
(Owner’s Investment)
(Earnings)
Cash
+
Accounts Receivable
+
Office Supplies
+
Prepaid Insurance
=
Accounts Payable
+
D. Segal, Capital
–
D. Segal, Drawing
+
Revenues
–
Expenses
Description
(a)
15000
15000
(b)
-1800
3800
2000
(c)
-1000
1000
(d)
1700
1000
2700
service fees
(e)
-1800
-1800
(f)
-750
750
rent expense
(g)
-650
650
Bal.
10700
1000
3800
1000
200
15000
650
2700
750
Cash
Accounts Payable Accounts Receivable
David Segal, Capital
Office Supplies
David Segal, Drawing
Prepaid Insurance
Service Fees
Total Assets
Rent Expense
Total Liabilities and Owner’s Equity
Problem 9B – page 47 EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION
David Segal started a business. During the first month (October 20--), the following transactions occurred.
(a) Invested cash in the business, $15,000.
(b) Bought office supplies for $3,800: $1,800 in cash and $2,000 on account.
(c) Paid one-year insurance premium, $1,000.
(d) Earned revenues amounting to $2,700: $1,700 in cash and $1,000 on account.
(e) Paid cash on account to the company that supplied the office supplies in transaction (b), $1,800.
(f) Paid office rent for the month, $650.
(g) Withdrew cash for personal use, $150.
REQUIRED
Show the effect of each transaction on the individual accounts of the expanded accounting equation: Assets = Liabilities + Owner’s Equity (Capital – Drawing + Revenues – Expenses). After transaction (g), report the totals for each element. Demonstrate that the accounting equation has remained in balance.
Assets
=
Liabilities
+
Owner’s Equity
(Items Owned)
(Amts. Owed)
(Owner’s Investment)
(Earnings)
Cash
+
Accounts Receivable
+
Office Supplies
+
Prepaid Insurance
=
Accounts Payable
+
D. Segal, Capital
–
D. Segal, Drawing
+
Revenues
–
Expenses
Description
(a)
15000
15000
(b)
-1800
3800
2000
(c)
-1000
1000
(d)
1700
1000
2700
service fees
(e)
-1800
-1800
(f)
-750
750
rent expense
(g)
-650
650
Bal.
10700
1000
3800
1000
200
15000
650
2700
750
Cash
Accounts Payable Accounts Receivable
David Segal, Capital
Office Supplies
David Segal, Drawing
Prepaid Insurance
Service Fees
Total Assets
Rent Expense
Total Liabilities and Owner’s Equity
Problem 9B – page 47 EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION
David Segal started a business. During the first month (October 20--), the following transactions occurred.
(a) Invested cash in the business, $15,000.
(b) Bought office supplies for $3,800: $1,800 in cash and $2,000 on account.
(c) Paid one-year insurance premium, $1,000.
(d) Earned revenues amounting to $2,700: $1,700 in cash and $1,000 on account.
(e) Paid cash on account to the company that supplied the office supplies in transaction (b), $1,800.
(f) Paid office rent for the month, $650.
(g) Withdrew cash for personal use, $150.
REQUIRED
Show the effect of each transaction on the individual accounts of the expanded accounting equation: Assets = Liabilities + Owner’s Equity (Capital – Drawing + Revenues – Expenses). After transaction (g), report the totals for each element. Demonstrate that the accounting equation has remained in balance.