Solve the following questions:

Quick Study $1-10$ and $1-11$:

QS $1-10$ Applying the accounting equation LO$7$ Determine the missing amount for each of the following equations:

Assets $=$ Liabilities $+$ Equity

$$75,000=$

$$40,500$

$+$

$$300,000=+$ $$85,500$

$=$ $$187,500+$ $$95,400$

QS $1-11$ Applying the accounting equation L$07$

Use the accounting equation to determine:

The equity in a business that has $$374,700$ of assets and $$252,450$ of liabilities.

The liabilities of a business having $$150,900$ of assets and $$126,000$ of equity.

The assets of a business having $$37,650$ of liabilities and $$112,500$ of equity

Demonstration Problem:

Solve the Demonstration problem following the Format of Exhibit $1\mathrm{.}15.$ The Format is available in your Day $3$ material:

After several months of planning, Joanne Cardinal started a haircutting business called The Cutlery. The following business activities occurred during its first month, August $2017$:

On August $1,$ Cardinal put $$16,000$ cash into a checking account in the name of The Cutlery. She also invested $$10,000$ of equipment that she already owned.

On August $2,$ she paid $$2000$ cash for furniture for the shop.

On August $3,$ she paid $$3,200$ cash to rent space in a strip mall for August.

On August $4,$ she equipped the shop by installing the old equipment and some new equipment that she bought on credit for $$21,000.$ This amount is to be repaid in three equal payments at the end of August, September, and October.

On August $5,$ The Cutlery opened for business. Receipts from services provided for cash in the first week and a half of business $($ended August $15)$ were $$1,100.$

On August $15,$ Cardinal provided haircutting services on account for $$750.$

On August $17,$ Cardinal received a $$750$ cheque in the mail for services previously rendered on account.

On August $17,$ Cardinal paid wages of $$250$ to an assistant for working during the grand opening.

On August $18,$ Cardinal interviewed a job applicant. The applicant was successful in getting the position and will receive $$750$ per week for part$-$time work starting in September.

Cash receipts from services provided during the second half of August was $$1,950.$

On August $31,$ Cardinal paid an installment on the account payable created in $($d$).$

On August $31,$ the August hydro bill for $$450$ was received. It will be paid on September $14.$

On August $31,$ Cardinal withdrew $$500$ cash for her personal use.

Required

Arrange the following asset, liability, and equity titles in a table similar to the one in Exhibit $1\mathrm{.}15$: Cash; Accounts Receivable, Furniture; Store Equipment; Accounts Payable and Joanne Cardinal, Capital. Show the effects of each transaction on the equation. Explain each of the changes in equity.

Prepare an income statement for August.

Prepare a statement of changes in equity for August.

Prepare a balance sheet as of August $31$