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EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION Jay Pembroke started a business. During the first month (April 20--), the following transactions occurred. (a) Invested cash in the business, $18,000. (b) Bought office supplies for $4,600: $2,000 in cash and $2,600 on account. (c) Paid a one-year insurance premium, $1,200. (d) Earned revenues totaling $3,300: $1,300 in cash and $2,000 on account. (e) Paid cash on account to the company that supplied the office supplies in transaction (b), $2,300. (f) Paid office rent for the month, $750. (g) Withdrew cash for personal use, $100. 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. STATEMENT OF OWNER’S EQUITY Based on Problem 2-9A, prepare a statement of owner’s equity for Jay Pembroke for the month of April 20--.

          EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION
Jay Pembroke started a business. During the first month (April 20--), the following transactions occurred.
(a) Invested cash in the business, $18,000.
(b) Bought office supplies for $4,600: $2,000 in cash and $2,600 on account.
(c) Paid a one-year insurance premium, $1,200.
(d) Earned revenues totaling $3,300: $1,300 in cash and $2,000 on account.
(e) Paid cash on account to the company that supplied the office supplies in transaction (b), $2,300.
(f) Paid office rent for the month, $750.
(g) Withdrew cash for personal use, $100.

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.

STATEMENT OF OWNER’S EQUITY
Based on Problem 2-9A, prepare a statement of owner’s equity for Jay Pembroke for the month of April 20--.

Added by Benjamin C.

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