Question

Required information [The following information applies to the questions displayed below.] Jake owns a lawn maintenance company, and Luke owns a machine repair shop. For the month of July, the following transactions occurred. July 3 Jake provides lawn services to Luke's repair shop on account, $390. July 6 One of Jake's mowers malfunctions. Luke provides repair services to Jake on account, $340. July 9 Luke pays $390 to Jake for lawn services provided on July 3. July 14 Luke borrows $490 from Jake by signing a note. July 18 Jake purchases advertising in a local newspaper for the remainder of July and pays cash, $120. July 20 Jake pays $340 to Luke for services provided on July July 27 Luke performs repair services for other customers for cash, $690. July 30 Luke pays employee salaries for the month, $190. July 31 Luke pays $490 to Jake for money borrowed on July 14. 2. Using the format shown below, enter the impact of each transaction on the accounting equation for each company. (Decreases to account classifications should be entered as a negative.) JAKE'S LAWN MAINTENANCE COMPANY Assets - Liabilities + Stockholders' Equity $ 390 0 390 - Assets $ LUKE'S REPAIR SHOP Liabilities + Stockholders' Equity $ 390 July 03 3901 (390)

Answer 1

Accounting equation

	JAKE's LAWN Maintenance Company					LUKE's Repair Shop
	Assets	=	Liabilities	+	Stockholder's equity	Assets	=	Liabilities	+	Stockholder's equity
July 03	390		0		390	0		390		-390
July 06	0		340		-340	340		0		340
July 09	390					-390		-390
	-390
July 14	-490					490		490		0
	490
July 18	-120		0		-120
July 20	-340		-340	0		340		0		0
						-340
July 27						690		0		690
July 30						-190		0		-190
July 31	490					-490		-490		0
	-490