Question

OBJ.4 Problems: Series B ✓ Cash balat end of March: $48,650 ME HOW 1-18 Transactions Amy Austin established an insurance agency on March 1 of the current year and completed the following transactions during March: a. Opened a business bank account with a deposit of $50,000 from personal funds. b. Purchased supplies on account, $4,000. c. Paid creditors on account, $2,300. d. Received cash from fees earned on insurance commissions, $13,800. e. Paid rent on office and equipment for the month, $5,000. f. Paid automobile expenses for month, $1,150, and miscellaneous expenses, $300. 8. Paid office salaries, $2,500. h. Determined that the cost of supplies on hand was $2,700; therefore, the cost of sup- plies used was $1,300. i. Billed insurance companies for sales commissions earned, $12,500. 1 Withdrew cash for personal use, $3,900. Instructions 1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings: Assets - Liabilities + Accounts Accounts Cash + Receivable + Supplies - Payable + Amy Austin, Capital Amy Austin, Drawing Owner's Equity Fees Rent Salaries Supplies Auto Misc. + Earned - Expense - Expense - Expense - Expense - Expense -

Answer 1

Answer:

	Assets					=	Liabilities	+	Owner's Equity
	Cash	+	Accounts Receivable	+	supplies	=	Accounts payable	+	Amy Austin Capital	-	Amy Austin, Drawing	+	Fees Earned	-	Rent Expense	-	Salaries Expense	-	Supplies Expense	-	Auto Expense	-	Misc. Expense
a	$50,000	+		+		=		+	$50,000	-		+		-		-		-		-		-
b		+		+	$4,000	=	$4,000	+		-		+		-		-		-		-		-
c	($2,300)	+		+		=	($2,300)	+		-		+		-		-		-		-		-
d	$13,800	+		+		=		+		-		+	$13,800	-		-		-		-		-
e	($5,000)	+		+		=		+		-		+		-	$5,000	-		-		-		-
f	($1,450)	+		+		=		+		-		+		-		-		-		-	$1,150	-	$300
g	($2,500)	+		+		=		+		-		+		-		-	$2,500	-		-		-
h		+		+	($1,300)	=		+		-		+		-		-		-	$1,300	-		-
i		+	$12,500	+		=		+		-		+	$12,500	-		-		-		-		-
j	($3,900)	+		+		=		+		-	$3,900	+		-		-		-		-		-
Total	$48,650	+	$12,500	+	$2,700	=	$1,700	+	$50,000	-	$3,900	+	$26,300	-	$5,000	-	$2,500	-	$1,300	-	$1,150	-	$300