Analyzing the effects of transactions on the accounting equation.Sherrye Cravens owns Crav...

Analyzing the effects of transactions on the accounting equation.

Sherrye Cravens owns Cravens’s Consulting Service. At the beginning of September, her firm’s financial records showed the following assets, liabilities, and owner’s equity.

INSTRUCTIONS

Set up an equation using the balances given above. Record the effects of the following transactions in the equation. (Use plus, minus, and equals signs.) Record new balances after each transaction has been entered. Prove the equality of the two sides of the final equation on a separate sheet of paper.

TRANSACTIONS

1. Performed services for $8,000 on credit.

2. Paid $2,880 in cash for utilities.

3. Performed services for $10,000 in cash.

4. Paid $1,600 in cash for office cleaning service.

5. Sent a check for $4,800 to a creditor.

6. Paid $1,920 in cash for the telephone bill.

7. Issued checks for $14,000 to pay salaries.

8. Performed services for $11,200 in cash.

9. Purchased additional supplies for $2,000 on credit.

10. Received $6,000 in cash from credit clients.

Analyze: What is the ending balance for owner’s equity after all transactions have been recorded?