Question

Received cash on account fom De Shephard $150.00 10 Pad cash on m a caw ca. 500.00 11. Podcash for one month of insurance $100.00 12 Received cash from sales 5475.00 1 Owner withinwegurity in the form of cash. 800.00 Cikalonge Problem: Determining how transactions change an accounting equation 104,5,6 + Owner's Equity owns a tutoring service called Homework Helper On October 30, Homework Helper's accounting equatio nd the following account balances. Use the form in your Working Papers to complete this problem, Liabilities Acets. Pay. Ashley Tech Services + Linda Lu. Capital 7.362 Prepaid Aucts Re- Supplies Insurance 3145 Daycare Cash Instructions: 1. For each transaction complete the following: Analyze the transaction to determine which accounts in the accounting equation are affected. h Write the amount in the appropriate columns, using a plus sign (+) if the account increases or a minus sign (-) if the account decreases For transactions that change owner's equity, write in parentheses a description of the transaction to the right of the amount d Calculate the new balance for each account in the accounting equation. e. Before going on to the next transaction, determine that the accounting equation is still in balance. 2. Answer the following questions a. Why can the owner of a business withdraw assets from that business for personal use? b. Why would the owner withdraw assets other than cash? Transactions: 1. Took $300.00 of supplies for personal use. 2. Had computer repaired at Ashley Tech Services and agreed to pay Ashley Tech Services at a later date, $225.00. 3. Linda Liu sold her personal book collection for $750.00 cash. 4. Paid Ashley Tech Services, $125.00. 21st Century Skills Creativitu

Answer 1

Transaction = + Linda Liu L capital 190 casht te t Daycare 7542 / 1265 Accounts pay Ashley tech 3145 Suppliest Prepaid insurance 1100 .600 Bal 1 7362 Trans 1 6300) 800 7542 1265 3145 + 225 (+300) 7062 (- 225) 6837 1265 17542 800 Balance Tran-2 Balance Tran. 3 Balance 3370 + 750 1265 800 600 3370 7587 It 750 8292 E125) 8167 Thany (-125) 800 1265 6.00 3245 Balance 7587

1.took $300 of supplies for personal use.

As drawings or withdrawal decrease capital, hence, it is
deducted from capital.

2.had comuter repaired at ashley tech services and agreed
to pay ashley tech services at a later date $ 225

The company incurred in $225 Repairs Expense. Expenses decrease capital. The amount has not yet been paid. Thus, it results in an increase in total liabilities

3.Linda Liu sold her personal book collection for 750 cash

received cash for selling book. Cash increased thereby increasing assets. At the same time, capital is increased
as a result of the income (Service Revenue).

4.Paid ashley tech services, $125

as the payment made to ashley tech services for the service
rendered before, liability(accounts payable) decreased

2. (a)

Why can the owner of a business withdraw assets from that business for personal use?

ans-

As the business owner, he/she controls all those assets and is responsible for them, he/she can take parts of them home if they so choose. This is a way to manage resources, especially if those resources are still useful in some way.

(b) Why would the owner withdraw assets other than cash?

ans-

It could be for various reasons, most plausible however would be"

Maybe he/she needs the assets more than cash at the moment.