Exercise 1 The following are transactions for Sameer new business during the mon

Question

Exercise 1 The following are transactions for Sameer new business during the month of September, we a going to see their effect on the basic accounting equation: re 1- Sameer invested $15000 cash in the business 2- Purchase of equipment of $7000. 3- Purchase of supplies on credit of $1600. 4- Provide services of cash $1200. 5- Purchase of advertising on credit of $250. 6- Provide services of $3500, cash $2000 and $1500 billed on account 7- Payment of expenses of cash $1700. 8- Payment of accounts payable of $250. 9- Receipt of cash from customers on account of $600. 10- Withdrawal of cash by owner of $1300. Instructions: A: Prepare a tabular analysis for the previous transactions. B: Prepare Financial Statements

Explanation / Answer

Solution A:

Solution B:

Accounting Equation for September Event Asset = Liabilities + Owner's Equity Cash + Equipment + Accounts Receivabe + Supplies Accounts Payable Owner's Capital + Retained Earnings 1 $15,000.00 $15,000.00 2 -$7,000.00 $7,000.00 3 $1,600.00 $1,600.00 4 $1,200.00 $1,200.00 5 $250.00 -$250.00 6 $2,000.00 $1,500.00 $3,500.00 7 -$1,700.00 -$1,700.00 8 -$250.00 -$250.00 9 $600.00 -$600.00 10 -$1,300.00 -$1,300.00 Bal. $8,550.00 + $7,000.00 + $900.00 - $1,600.00 = $1,600.00 + $13,700.00 + $2,750.00

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