Problem

Analyzing the effects of transactions on the accounting equation.On July 1, John Walker es...

Analyzing the effects of transactions on the accounting equation.

On July 1, John Walker established Home Appraisal Services, a firm that provides expert residential appraisals and represents clients in home appraisal hearings.

INSTRUCTIONS

Analyze the following transactions. Record in equation form the changes that occur in assets, liabilities, and owner’s equity. (Use plus, minus, and equals signs.)

TRANSACTIONS

1. The owner invested $92,000 in cash to begin the business.


2. Paid $18,750 in cash for the purchase of equipment.


3. Purchased additional equipment for $12,400 on credit.


4. Paid $10,800 in cash to creditors.


5. The owner made an additional investment of $25,000 in cash.


6. Performed services for $7,200 in cash.


7. Performed services for $4,300 on account.


8. Paid $3,000 for rent expense.


9. Received $2,500 in cash from credit clients.


10. Paid $5,460 in cash for office supplies.


11. The owner withdrew $8,000 in cash for personal expenses.


Analyze: What is the ending balance of cash after all transactions have been recorded?

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Solutions For Problems in Chapter 2