Question

1. The opening financial position is shown for Sheila's Interior Decorat- ing of Sudbury, Ontario, owned by Sheila Kostiuk. In your Workbook, record the changes required for the seven transactions that follow. After each transaction, calculate the new totals and make sure the accounting equation balances. OWNER'S EQUITY ASSETS LIABILITIES + SHEILA'S INTERIOR DECORATING A/R E. Kerluck Supplies Office Furniture A/P Pine Motors А/Р Home Supply 1 000 S. Kostiuk, Capital Cash Automobile Opening Balances 2 050 150 600 I 200 3 000 TRANSACTIONS 1. Stationery and supplies are purchased from Home Supply on credit for $175. They will be paid for within 30 days. 2. A new desk for the office is purchased for $450 cash. 3. E. Kerluck, a debtor, pays his debt in full. 4. A $300 service is performed for a customer, who pays immediately in cash. 5. A used automobile costing $6500 is purchased from Pine Motors. A down payment of $500 is made. It is agreed that the remainder of the pur- chase price will be paid within three months.

Answer 1

Transactions + Balance Sheet Equation = Assets = Liabilities + Owners Equity Assets A/R E Kerluck Supplies Office furniture Automobiles Total 2050 150 600 1200 4000 Liabilities Owners Equity A/P Home supply A/P Pine Motors + Kostick Capital Total 1000 3000 4000 + 175 4175 = 175 + 4175 2050 1501 775 0 1175 0 + 3000 4175 1200 450 1650 + -450 1600) 4175 150 775 o 1175) 01 + 3000 4175 1.50 - 150 + 4175 0 775 1650) 0 1175 01 + 3000 4175 Cash Opening Balance 1 Purchase of supplies from Home supply Total 2 Purchased furniture Total 3 Cash received from Kerluck 150 Total 4 Service performed for cash Total 5 Purchase of Automobile for cash and credit Total 6 Payment to Home supply Total 7 Withdrawals by owner Total 1750 300 20501 4175 = 4175 = 4175| = 4175 4175| = 4475 = 4475] = 10475 10475 = 9775| = 9775| = + 4475 300 3300 o 775 1650 0 1175 ol + 4475 -500 6000| + 6500 6500 10475 10475 1550 0 775 1650 1175 60001 + 3300 -700 -700 + 9775 o 775 1650 6500 475 6000 + 3300 9775 850 -2001 9575 = ol + -200 9575 9575 650 0 775 1650 6500 9575 = 475 6000 + 3100

Individual total and combined total are given.