Tom?s Tree Trimming is a sole proprietorship business run by Tom Petty. During its first month of operations, the following transactions occurred:

1. Tom Petty starts the business by investing cash of $10,000 and equipment worth $20,000.

2. Tom purchased equipment for $5,000. He paid $1,000 cash and signed a note for the remaining $4,000.

3. Tom incurred $600 in advertising expense. He opened an account with the local advertising firm. The advertising firm will bill him for the ads.

4. Tom provided $3,400 of services for several customers. Tom received $1,400 in cash and the rest was billed on account.

5. Tom received a $500 deposit for a tree trimming job to be done next month.

6. Tom withdrew $200 for personal use.

7. Tom paid the advertising bill (item 3).

8. Tom paid $1200 for a one-year business insurance policy.

9. Customers (from #4) paid $700.

10. Tom completed the tree trimming job (from #5) and received the $800 balance due on the job.

Required:

Using the table provided here, show how each transaction affects the accounting equation. You need not indicate the specific accounts affected.

Transcribed Image Text:

Item 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. ASSETS LIABILITIES + OWNER'S EQUITY Item 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. ASSETS LIABILITIES + OWNER'S EQUITY

Answer rating: 100% (QA)

S No Assets Liabilities Owner Equity 1 3000000 NA 3000000 2 400000 400000 NA 3 NA ... View the full answer