Question

Show the effect of each transaction on the three basic accounting elements by indicating the dollar amount of the proper element heading. Compute the resulting accounting equation. For those boxes in which you must enter a minus sign. (Example: -300) a. Owner invested $16,500 cash in the business. b. Paid premium for two-year insurance policy, $1,500. c. Purchased a van valued at $35,000 with $5,000 down payment; the balance to be paid over three years. d. Paid the rent for the month, $900. e. Purchased $470 of supplies for cash. f. Cash sales for the month, $8,750. g. Billed credit customers $14,200 for monthly services. h. Paid monthly utility bill, $210. i. Owner withdrew $2,200 for personal use. j. Received payments of $3,300 from credit customers. ASSETS Cash + Accounts Receivable + Supplies + Prepaid Insurance + Van =

          Show the effect of each transaction on the three basic accounting elements by indicating the dollar amount of the proper element heading. Compute the resulting accounting equation. For those boxes in which you must enter a minus sign. (Example: -300)

a. Owner invested $16,500 cash in the business.
b. Paid premium for two-year insurance policy, $1,500.
c. Purchased a van valued at $35,000 with $5,000 down payment; the balance to be paid over three years.
d. Paid the rent for the month, $900.
e. Purchased $470 of supplies for cash.
f. Cash sales for the month, $8,750.
g. Billed credit customers $14,200 for monthly services.
h. Paid monthly utility bill, $210.
i. Owner withdrew $2,200 for personal use.
j. Received payments of $3,300 from credit customers.

ASSETS

Cash + Accounts Receivable + Supplies + Prepaid Insurance + Van =

Show more…

Show the effect of each transaction on the three basic accounting elements by indicating the dollar amount of the proper element heading. Compute the resulting accounting equation. For those boxes in which you must enter a minus sign. (Example: -300)

a. Owner invested 16,500 cash in the business.
b. Paid premium for two-year insurance policy,1,500.
c. Purchased a van valued at 35,000 with5,000 down payment; the balance to be paid over three years.
d. Paid the rent for the month, 900.
e. Purchased470 of supplies for cash.
f. Cash sales for the month, 8,750.
g. Billed credit customers14,200 for monthly services.
h. Paid monthly utility bill, 210.
i. Owner withdrew2,200 for personal use.
j. Received payments of 3,300 from credit customers.

ASSETS

Cash + Accounts Receivable + Supplies + Prepaid Insurance + Van =

Added by Aaron M.

Financial Accounting for Undergraduates

James S. Wallace, Karen K. Nelson and… 4th Edition

Chapter 2

Instant Answer

Solved by Expert Shu Naito

12/12/2024

Step 1

The accounting equation is: \[ \text{Assets} = \text{Liabilities} + \text{Owner's Equity} \] Show more…

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Transcript

00:01 From a so owner invested in 16 ,500 cash in the business so that would be assets and so assets and cash would be 16 so this is just going to be the cash so one moment yes this is just going to be the cash and there is no liabilities effect 16 5 and the other entries will be zero and then b we have a paid premium for two -year insurance policy so that would be cash would be negative 1500 so that will be the assets no effect on the liabilities or owner's equity or excuse me here the owner's equity would also be plus 16 ,500 and and c, okay, so for the assets, the van would be 35 ,000, and then cash would be negative 5 ,000.

01:20 And for liabilities, there is a notes payable of 30 ,000.

01:28 And then there is no effect on the owner's equity.

01:31 D, you pay the rent, so cash 900, cash negative 900 assets.

01:39 Cash is negative 900, and for liabilities, there is no effect, and for owner's equity, that would be the rent expense as will be recorded as a rent expense, negative 900.

01:57 For e, you purchase 470 of supplies for cash, so the assets would be supply 470 and cash negative 470.

02:10 And for liabilities, there's no effect.

02:14 Owners equity also no effect.

02:20 If we'll have the cash sales for the month, 8 ,750.

02:25 For assets, the cash is going to increase by 875.

02:30 No effect on liabilities.

02:33 For owners equity, the revenue is going to be 875.

02:39 And for g, we have the build credit customers, 14 ,200...

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