E15 Compute the missing amount in the accounting equation for each business.

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Using the accounting equation

Marpole Dry Cleaners liabilities, $50,000

E16 Samson Kodua owns Grinds Coffee House, near the campus of Western Community College. The company has cash of $18,000 and furniture that cost $40,000. Debts include accounts payable of $7,000 and a $30,000 note payable.

Required

Write the accounting equation of Grinds Coffee House.

What is the owners equity of the company?

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Using the accounting equation

Owners equity, $21,000

E17 Indicate the effects of the following business transactions on the accounting equation of a proprietorship. Transaction a is answered as a guide.

Received $50,000 cash from the owner.

Answer: Increase asset (Cash)

Increase owners equity (Owner, Capital)

Paid the current months office rent of $4,000.

Paid $3,500 cash to purchase office supplies.

Performed engineering services for a client on account, $6,000.

Purchased office furniture on account at a cost of $5,000.

Received cash on account, $3,000.

Paid cash on account, $2,500.

Sold land for $50,000 cash, which was the businesss cost of the land.

Performed engineering services for a client and received cash of $6,000.

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Transaction analysis