Apple Tree had the following balances when formed: Assets Liabilities Cash $2,400 Notes payable $1,500 Equipment 1,300 Owner’s Equity Johnny, capital 2,200 Total assets $3,700 Total liabilities and owner’s equity $3,700

During the first year of operations, the following transactions occurred:
• Collected $12,000 cash in rental revenue.
• Made a $2,000 investment in equity securities using $1,000 cash and a $1,000 note payable.
• Incurred and paid $2,000 in cash for utilities expense, $3,500 in rent expense, and $2,200 in wages expense.
• Johnny, Apple Tree’s owner, withdrew $200 in cash from the business and contributed $1,500 in equipment. Show the cumulative effect on the accounting equation from the transactions for the year.

Answer rating: 100% (QA)

Assets Liabilities Owners Equity Cash Equipment Inve... View the full answer