Question

Cosmo Thomas started a new business, Thomas Gymnastics, and completed the following transactions during December: Dec. 1 Thomas contributed $19,000 cash in exchange for capital. 2 Received $3,800 cash from customers for services performed. 5 Paid $300 cash for office supplies. 9 Performed services for a customer and billed the customer for services rendered, $4,500. 10 Received $150 invoice for utilities due in two weeks. 15 Paid for advertising in the local paper, $350. 20 Paid utility invoice received on Dec. 10. 25 Collected cash in full from customer billed on Dec. 9. 28 Paid rent for the month, $2,600. 28 Paid $1,200 to assistant for wages. 30 Received $1,600 cash from customers for services performed. 31 Thomas withdrew $3,000 cash from the business. Analyze the effects of the transactions on the accounting equation of Thomas Gymnastics using a format similar to Exhibit F:1-5. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Accounts Payable; Thomas, Capital; Thomas, Withdrawals; Service Revenue; Rent Expense; Utilities Expense; Salaries Expense; and Advertising Expense.

Answer 1

Equity Rent Expense Thomas Withdrawls + Service Revenue Utilities Expenses - Salaries Expenses - Advertising Expenses + + + + + $3,800 $3,800 $0 + $0 - $0 $0 $0 + + + $0 + $0 $0 $0 $0 + + + $3,800 $4,500 $8,300 $0 + $0 - $0 $0 + + + $0 $150 $150 $0 + $8,300 $0 $0 + + + Assets Liabilities Date Cash + Accounts Receivable + Office Supplies - Accounts Payable + Thomas Capital Dec. 1 $19,000 + $19,000 - 2 $3,800 + Bal. $22,800 + $0 + $0 = $0 + $19,000 5 ($300) + $300 = Bal. $22,500 + $0 + $300 = $0 + $19,000 9 $4,500 + Bal. $22,500 + $4,500 + $300 = $0 + $19,000 10 $150 + Bal. $22,500 + $4,500 + $300 $150 + $19,000 15 ($350) + Bal. $22,150 + $4,500 + $300 = $150 + $19,000 20 ($150) + ($150) + Bal. $22,000 + $4,500 + $300 $0 + $19,000 25 $4,500 + ($4,500) + Bal. $26,500 + $0 + $300 = $0 + $19,000 28 ($2,600) + Bal. $23,900 + $0 + $300 $0 + $19,000 28 ($1,200) + Bal. $22,700 + $0 + $300 = $0 + $19,000 30 $1,600 + Bal. $24,300 + $0 + $300 $0 + $19,000 31 ($3,000) + Bal. $21,300 + $0 + $300 = $0 + $19,000 $0 $350 $350 $0 + $8,300 $ $0 - $150 $0 + + $8,300 $0 $150 $0 $350 $+ $0 + + + $0 + $8,300 $150 SO $350 + + + $0 $2,600 $2,600 $8,300 - $150 $350 $+ $0 + + + + $0 $1,200 $1,200 $0 + $2,600 $150 $350 + + + $8,300 $1,600 $9,900 $2,600 $150 $1,200 $350 + + + + $0 + $3,000 + $3,000 + $9,900 $2,600 $150 $1,200 $350

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