Amanda Maynes recently started a business, Mayne Events that will provide promotion and advertising for fund raising
Question:
Amanda Maynes recently started a business, Mayne Events that will provide promotion and advertising for fund raising events hosted by charities. She will operate the business as a proprietorship. The first month’s transactions are listed below:
1. Amanda invests $5,000 in the business out of her personal savings.
2. Amanda transfers a computer valued at $3,000 to the business.
3. Purchases computer supplies for $400 cash.
4. Pays $550 for wages to an assistant.
5. Completes advertising brochures for a client, who pays $700 for the service.
6. Advertisements for Mayne Events are run in the local newspaper at a cost of $600 on account.
7. Provides services totaling $1,200 for several clients – one client whose bill is $200 pays cash, the remainder are on account.
8. Pays the amount owing to the newspaper for the advertisements described in 6.
9. Half the amount receivable from customers is collected.
10. Purchases additional computer equipment for $450, cash.
11. Amanda withdraws $300 for personal use.
Instructions
b) Calculate total assets.
c) Calculate total liabilities.
d) Calculate profit.
e) Calculate owner’s equity.
f) Demonstrate that the accounting equation is in balance.
Expert Answer:
a Journal entries Cash 5000 Capital Amanda Maynes Proprietorship 5000 To record investment in the bu... View the full answer
