Using T accounts to record transactions involving assets, liabilities, and owner’s equity.
The following transactions took place at Windmill Equipment Service.
INSTRUCTIONS
For each transaction, set up T accounts from the following list: Cash; Shop Equipment; Store Equipment; Truck; Accounts Payable; Royce West, Capital; and Royce West, Drawing. Analyze each transaction. Record the effects of the transactions in the T accounts. Use plus and minus signs before the amounts to show the increases and decreases.
TRANSACTIONS
1. Royce West invested $40,000 cash in the business.
2. Purchased shop equipment for $3,600 in cash.
3. Bought store fixtures for $2,400; payment is due in 30 days.
4. Purchased a used truck for $20,000 in cash.
5. West gave the firm his personal tools that have a fair market value of $6,000.
6. Bought a used cash register for $5,000; payment is due in 30 days.
7. Paid $800 in cash to apply to the amount owed for store fixtures.
8. West withdrew $3,200 in cash for personal expenses.
Analyze: Which transactions affect the Cash account?
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