Answer:
Part (a) Shane has $ 12,300 in total assets
Part (b) Shane owes $ 2,300 in liabilities
Explanation:
Shane's Catering began with cash of $10,000
At the beginning the Accounting Records of Shane should reflect the following Account Balances
Cash $10000 (debit)
Owners Equity $ 10000 ( credit)
Shane then bought supplies for $2,300 on account.
When Shane buys supplies on account the transaction is recorded as follows
Inventory $2300 (debit)
Account Receivable $ 2300
Shane paid $7,500 for equipment
When Shane pays for equipment in cash the transaction is recorded as follows
Equipment $7500(debit)
Cash $7500(credit)
Balance of Assets is calculated as:
Cash 10000+Inventory 2300- Cash 7500+ Equipment 7500 =$12300
Balance of Liabilities is calculated as:
Trade Receivable $ 2300
