Transactions made by John Callahan Ltd., a law firm, for the month of March are shown below. Prepare a tabular analysis which shows the eff ects of these transactions on the expanded accounting equation, similar to that shown in Illustration 1.8.
1. The company performed R20,000 of services for customers, on credit.
2. The company received R20,000 in cash from customers who had been billed for services (in transaction 1).
3. The company received a bill for R3,200 of advertising but will not pay it until a later date.
4. John Callahan withdrew R2,500 cash from the business for personal use.

 Illustration 1.8

Transcribed Image Text:

Owner’s Equity = Liabilities + Assets Owner's Trans- Accounts Accounts Owner's + Receivable + Supplies + Equipment action Cash Payable + Capital Drawings + Rev. Exp. + €15,000 (1) +€15,000 (2) -7,000 (3) Initial invest. +€7,000 +€1,600 +€1,600 +€1,200 (4) +1,200 Service Revenue -€250 Adver. Expense +250 (5) (6) +1,500 +€2,000 +3,500 Service Revenue -600 Rent Expense -900 Sal/Wages Exp. -200 Utilities Expense (7) -600 -900 -200 (8) (9) (10) -250 -250 +600 -600 -1,300 -€1,300 Drawings € 8,050 + €1,600 + €15,000 €1,400 €1,600 + €7,000 €1,300 + €4,700 – €1,950 €18,050 €18,050