David Segal started a business. During the first month (October 20--), the following transactions occurred. (a) Invested

Question:

David Segal started a business. During the first month (October 20--), the following transactions occurred.
(a) Invested cash in the business, $15,000.
(b) Bought office supplies for $3,800: $1,800 in cash and $2,000 on account.
(c) Paid one-year insurance premium, $1,000.
(d) Earned revenues amounting to $2,700: $1,700 in cash and $1,000 on account.
(e) Paid cash on account to the company that supplied the office supplies in transaction (b), $1,800.
(f) Paid office rent for the month, $650.
(g) Withdrew cash for personal use, $150.


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.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

College Accounting

ISBN: 978-0538745192

20th Edition

Authors: Heintz and Parry

Question Posted: