University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

359

Pages:

4
Author:

stud_ice13

To show the effects of each transaction on the accounting equation, we can create a table similar to Exhibit 1.9 using the following headings: Cash, Accounts Receivable, Computer Supplies, Computer System, Office Equipment, Accounts Payable, Common Stock, Dividends, Revenues, and Expenses. After each transaction, we will update the balances to reflect the changes in the accounts. Here is the breakdown: Accoun Compu Accou Compu Office Comm Transact ts ter nts Divide Cash ter Equipm on ion Receiva Supplie Payabl nds System ent Stock ble s e Beginnin 0 0 0 0 0 0 0 0 g Balances 1. Oct 1: Rey invests $45,000 cash, $20,000 compute r system, +45,0 +73,00 0 0 +20,000 +8,000 0 0 and 00 0 $8,000 office equipme nt in exchange for common stock 2. Oct 3: Purchase d $1,420 of 0 0 +1,420 0 0 +1,420 0 0 compute r supplies on credit 3. Oct 6: Billed Easy Leasing +4,800 0 0 0 0 0 0 $4,800 0 for services perform ed Reven Expen ues ses 0 0 0 0 0 0 +4,800 0 Accoun Transact ts Cash ion Receiva ble 4. Oct 8: Paid $1,420 cash for the 0 compute 1,420 r supplies purchase d on credit 5. Oct 10: Hired a part0 0 time assistant (no entry required ) 6. Oct 12: Billed Easy Leasing $1,400 0 +1,400 for addition al services perform ed 7. Oct 15: Received $4,800 cash +4,80 -4,800 from 0 Easy Leasing as partial payment 8. Oct 17: Paid -805 0 $805 cash to Compu Accou Compu Office Comm ter nts Divide Reven Expen ter Equipm on Supplie Payabl nds ues ses System ent Stock s e 0 0 0 -1,420 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 +1,400 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 +805 Accoun Transact ts Cash ion Receiva ble repair compute r equipme nt 9. Oct 20: Paid $1,728 0 cash for 1,728 Faceboo k ads 10. Oct 22: Received $1,400 +1,40 -1,400 0 cash from Easy Leasing 11. Oct 28: Billed IFM Compan 0 +5,208 y $5,208 for services perform ed 12. Oct 31: Paid $875 -875 0 cash for assistant' s wages 13. Oct 31: Paid $3,600 cash 0 dividend 3,600 to sharehol der Compu Accou Compu Office Comm ter nts Divide Reven Expen ter Equipm on Supplie Payabl nds ues ses System ent Stock s e 0 0 0 0 0 0 0 +1,728 0 0 0 0 0 0 0 0 0 0 0 0 0 0 +5,208 0 0 0 0 0 0 0 0 0 0 0 0 0 +3,600 0 Final Balances (Check): +875 0 • • • Cash = $42,772 Revenues = $11,408 Expenses = $3,408 Explanation: • • • • After each transaction, the balances are updated, showing how cash, revenues, and expenses change throughout the period. Cash: Starting at $45,000 and changing with each inflow/outflow. Revenues: Increases with billed services. Expenses: Increases with repairs, ads, and wages.