TRANSACTIONS 1. John Amos started the business with a cash investment of $59.000

Question

TRANSACTIONS 1. John Amos started the business with a cash investment of $59.000. 2. Purchased equipment for $21,500 on credit 3. Performed services for $3,000 in cash. 4. Purchased additional equipment for $4,500 in cash. 5. Performed services for $5.000 on credit. 6. Paid salaries of $4,400 to employees. 7. Received $3,100 cash from charge account customers. 8. Paid $12,600 to a creditor on account Show how each transaction would be recorded in the accoun ting equation. (Enter decreases to account balances with a minus sign) John Amos. Cash * EquipmentAccounts Revenue Totals

Explanation / Answer

Cash + Accounts receivable + Equipment = Accounts payable + Capital + Revenue - Expenses 1 59000 + 0 + 0 = 0 +    59,000 + 0 - 0 2 0 + 0 +          21,500 =                        21,500 + 0 + 0 - 0 3 3000 + 0 + 0 = 0 + 0 +        3,000 - 0 4 -4500 + 0 +            4,500 = 0 + 0 + 0 - 0 5 0 + 5000 + 0 = 0 + 0 + 5000 - 0 6 -4400 + 0 + 0 = 0 + 0 + 0 - 4400 7 3100 + -3100 + 0 = 0 + 0 + 0 - 0 8 -12600 + 0 + 0 = -12600 + 0 + 0 - 0 Total 43600 + 1900 + 26000 = 8900 + 59000 + 8000 - 4400

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