Question

TRANSACTIONS1. John Amos started the business with a cash investment of $60,000.2. Purchased equipment for $22,000 on credit.3. Performed services for $3,100 in cash.4. Purchased additional equipment for $4,600 in cash.5. Performed services for $5,050 on credit.6. Paid salaries of $4,450 to employees.7. Received $3,200 cash from charge account customers.8. Paid $13,000 to a creditor onaccount.show how each transaction would be recorded in the accounting equation. (enter decreases to account balances with a minus sign.)

Answer 1

Answer:

Cash  44,250      

Receivables  $1,850      

Equipment $26,600        

Accounts payable 9,000    

Capital 60,000    

Revenue 8,150  

Expenses 4,450

Explanation:

The question is to determine the recording of the transactions above on the Accounting equation

The accounting equation says Assets = Liabilities + Owners' Equity

In this context assets = Cash, Receivables and Equipment

Liabilities = Payables

Owners' Equity = Capital + Revenue - Expenses

The Accounting Equation

ASSETS                                            = LIABILITIES       +     OWNERS EQUITY

 Cash      + Receivables + Equip.           payable   + Capital + Rev -  Expens

1. $60,000                                                                      60,000

2.                                            $22,000     $22,000

3. $3,100                                                                                        3,100

4. -4,600                                    4,600

5                      $5,050                                                                  5,050

6. -4,450                                                                                                    4,450

7. 3,200           -3,200

8. -13,000                                                    -13,000

    44,250        $1,850        $26,600         9,000    60,000     8,150   4,450