Financial Accounts

a Stewart invested $100,000 and became the sole shareholder. Assets + Expense = Liabilities + Incomes Asset named Cash Balance created and Liability Shareholder's Capital gets created 100000 + 0 = 100000 + 0 b Purchased inventory on account for $200,000. Assets + Expense = Liabilities + Incomes Asset named Inventory created and Liability Vendor payable gets created 200000 + 0 = 200000 + 0 c Sold inventory for $200,000. $75,000 of the sales were for cash and $125,000 were on account. The inventory sold had cost Stewart $120,000. Assets + Expense = Liabilities + Incomes Asset named Cash Balance with get added with 75000, Asset named Account receivable will get added with 125000 and Income named Sales Revenue will get added with 200000. Note to be considered here is income is income whether received or not. 75000 + 0 = 0 + 200000 125000 + 0 = 0 + 0 200000 + 0 = 0 + 200000 Assets + Expense = Liabilities + Incomes Asset named Inventory decreases by 120000 and Expense named Cost of goods sold gets created -120000 + 120000 = 0 + 0 d Paid $140,000 of accounts payable. Assets + Expense = Liabilities + Incomes Asset named Cash Balance Decreases by 140000 and Liability named Vendor payable gets reducted by 140000 -140000 + 0 = -140000 + 0 e Collected $50,000 on account Assets + Expense = Liabilities + Incomes Asset named Account receivable decreases by 50000 and Cash balance increases by 50000 50000 + 0 = 0 + 0 -50000 + 0 = 0 + 0 0 + 0 = 0 + 0 f Paid $45,000 in operating expenses. Assets + Expense = Liabilities + Incomes Asset named Cash Balance decreases by 45000 and Expense named Operating cost gets created by 45000 -45000 + 45000 = 0 +