Question

Presented below are eight business transactions. Indicate the effect of each transaction on each element of the accounting equation. (a) Purchased $259 of supplies on account. (b) Performed $497 of services on account. (c) Paid $291 of operating expenses. (d) Paid $259 cash on account for the supplies purchased in item (a) above. (e) Invested $1,191 cash in the business. (f) Owner withdrew $350 cash. (g) Hired an employee to start working the following month. (h) Received $497 from a customer who had been billed previously in item (b) above. (1) Purchased $435 of equipment in exchange for a note payable. Use the below format, in which the first one has been done for you as an example:(if a transaction causes a decrease in Assets, Liabilities or Owner's Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity Item that was reduced. See Illustration 1-13 for example.) Owner's Equity Transaction Assets Liabilities Capital Drawings $259 $259 $497 $1291) (5259) ($259)

Answer 1

Q1:

			Owner's Equity
Transaction	Assets	Liabilities	Capital	Drawings
(a)	$259	$259	$0
(b)	$497	$0	$497
(c)	($291)	$0	($291)
(d)	($259)	($259)	$0
(e)	$1,191	$0	$1,191
(f)	($350)	$0	$0	$350
(g)	$0	$0	$0
(h)	$497	$0	$0
	($497)	$0	$0
(i)	$435	$435	$0

Q2:

ORIOLE'S HOME RENOVATIONS
Income Statement
For the year ended December 31,2021
Revenues:
Service revenue		$157,236
Expenses:
Insurance expense	$3,067
Interest expense	$1,041
Operating expenses	$3,587
Salaries expense	$88,499
Supplies expense	$19,300
Total Expenses		$115,494
Net income		$41,742