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y Reokmarks Jools Help https://newconnect.mheducation.com low connect.html?returnUrl: https%3AS dqd Exam Chp 1-11 Exercise 2.5 Determining the effects of transactions on the accounting equation. L?2- The Copy Center had the transactions listed below during the month of June. TRANSACTIONS ts 1. John Amos started the business with a cash investment of $57,000 2. Purchased equipment for $20,500 on credit 3. Performed services for $2,800 in cash 4. Purchased additional equipment for $4,300 in cash. 5. Performed services for $4,900 on credit 6. Paid salaries of $4,300 to employees 7. Received $2,900 cash from charge account customers 8. Paid $11,800 to a creditor on account Show how each transaction would be recorded in the accounting equation (Enter decreases to account belances w John Amos, Accounts Equipment 7 8 9 5 e 6Explanation / Answer
The totals row can be used to verify the equation.
Total assets = 42300+2000+24800 = $69,100
Total liabilities = 8700
Total owner's equity = 57000+7700-4300 = 60400
Thus assets = liabilities+owner's equity
or, 69,100 = 8,700+60,400
Assets = Liabilities + Owner's equity Cash + Accounts Receivable + Equipment = Accounts Payable + John Amos Capital + Revenue - Expenses 1 57,000.00 + + = + 57,000.00 + - 2 + + 20,500.00 = 20,500.00 + + - 3 2,800.00 + + = + + 2,800.00 - 4 -4,300.00 + + 4,300.00 = + + - 5 + 4,900.00 + = + + 4,900.00 - 6 -4,300.00 + + = + + - 4,300.00 7 2,900.00 + -2,900.00 + = + + - 8 -11,800.00 + + = -11,800.00 + + - Totals 42,300.00 + 2,000.00 + 24,800.00 = 8,700.00 + 57,000.00 + 7,700.00 - 4,300.00Related Questions
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