Exhibit 1:

P 1. on the QUIRED answer? ection After receiving his degree in computer science, John Unger started his own business, Regency Business Services Company. The company completed the following transactions: a. John deposited $18,000 in the bank to start the business and purchased a systems library with an additional investment of $1,840. b. Paid current month's rent on an office, $720. c. Purchased computers and other systems equipment for cash, $10,000. d. Purchased computer supplies on credit, $1,200. e. Received revenue from a client, $1,600. f. Billed a client on completion of a short project, $1,420. g. Paid wages, $800. h. Received a partial payment from the client billed in transaction f, $160. i. Withdrew cash for personal expenses, $500. j. Made a partial payment on the computer supplies purchased in transaction d, $400. 1. Arrange the asset, liability, and owner's equity accounts in an equation similar to that in Exhibit 1, using the following account titles: Cash, Accounts Receivable, Computer Supplies, Equipment, Systems Library, Accounts Payable, and John Unger, Capital. 2. Show by addition and subtraction, as in Exhibit 1, the effects of the transactions on the accounting equation. Show new balances after each transaction, and identify each owner's equity transaction by type. 3. Contrast the effects on cash flows of transactions d and j with transaction c and of transactions f and h with transaction e. EXHIBIT 1 Summary of Effects of Illustrative Transactions on Financial Position 1. 2. bal. 3. bal. 4. bal. 5. bal. 6. bal. 7. bal. 8. 9. bal. 10. bal. 11. bal. Cash $50,000 -35,000 $15,000 $15,000 -200 $14,800 +1,500 $16,300 $16,300 + 1,000 $17,300 - 1,000 -400 $15,900 $15,900 -600 $15,300 Accounts Receivable +$2,000 $2,000 -1,000 $1,000 $1,000 $1,000 $1,000 Assets Supplies + $500 $500 $500 $500 $500 $500 $500 $500 $500 $51,800 Land Exhibits illustrate financial information. +$10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 Building +$25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 Liabilities Accounts Payable +$500 $500 -200 $300 $300 $300 $300 $300 +300 $600 $600 + John Shannon, Capital $50,000 $50,000 $50,000 $50,000 +$1,500 $51,500 +2,000 $53,500 $53,500 - 1,000 -400 $52,100 -300 $51,800 -600 $51,200 $51,800 Owner's Equity Type of Owner's Equity Transaction Owner's Investment Commissions Earned. Commissions Earned Equipment Rental Expense Wages Expense Utilities Expense Owner's Withdrawal