Question

THE GEORGE ACCY2001 ASHINGTON UNIVERSITY Introductory Financial Accounting Spring 2019 3.00 Credit Hours WASHINGTON, DC Homework Assignment #2 Due Date: Tuesday, January 29, 2019. To be submited through Blackboard by 4pm Exercise 1 -Understanding double-entry accounting transactions Below are the records of five transactions made by Roni Inc. during the year ended December 31, 2017 2017 was Roni Inc.'s first year of operation Accounts Ending Balance Dollar Effect of Each of the Six Transactions 20,000 (7,000) S4,000) S(5,000) Cash Investments Notes Receivable Machine Notes Common Stock (100 shares) Additional paid-in capital 4,000 5,000 $2,000 2,000 7000 (3,000) (17.000) Required: (1) Explain the nature of cach of the five transactions above. Example for transaction (2): Roni Inc. acquired a machine for $7,000 in cash (2) Compute the ending balance of each account and prepare a classified balance sheet for Roni Inc. as of December 31, 2017

Answer 1

1) Explaination of the transactions:
Transaction	Debit	Credit	Explanation
1	Cash 20000	Common Stock (3000)	100 common shares, par $30 issued for cash $20000
		Additional Paid in Capital (17000)
2	Machine 7000	Cash (7000)	Machine acquired in cash for $7000
3	Investments 4000	Cash (4000)	Investment made of cash for $4000.
4	Notes Receivable 5000	Cash (5000)	Note received against cash for $5000
5	Machine 2000	Notes payable (2000)	Machine acquired on signing Note for $2000
2) Ending Balance:
Accounts Title	Debit $	Credit $
Cash	4000
Investments	4000
Notes Receivables	5000
Machine	9000
Notes Payable		2000
Common Stock		3000
Additional paid in capital		17000
TOTAL	22000	22000
CLASSIFIED BALANCE SHEET:
ASSETS:	AMOUNT $
Cash	4000
Investments	4000
Current Assets	8000
Note Receivables	5000
Machine	9000
Total Assets	22000
LIABILITIES AND EQUITY:	AMOUNT $
Notes payable	2000
Common Stock (100 shares)	3000
Additional paid in capital	17000
Total Liabilities and Equity	22000