24 Jul Assuming the role of an accountant, your new client Suzie Maye needs help in setting up basic accounting practices for her business. You begin by showing her how to set up a transa
Assuming the role of an accountant, your new client Suzie Maye needs help in setting up basic accounting practices for her business. You begin by showing her how to set up a transaction analysis based on the accounting equation of Assets = Liabilities + Owner’s Assets. You show Suzie how to enter the various assets, liabilities and owner’s assets into the transaction analysis template demonstrating the balance based on the equation. This will help Suzie understand that through this process every financial transaction that occurs in her business must be reconciled on each side of the equation.
Please record the following transactions using transaction analysis. Please use the template attached to complete.
"I Do" Example IP1
| Template | I DO | ||||||||||||||||||||||
| Categories | Assets | = | Liabilities | + | Owner's Equity | Balance Check | |||||||||||||||||
| Accounts | Accounts | Accounts | Notes | IN | OUT | Service | Expense | Total | Total | ||||||||||||||
| Date | Cash | + | Receivable | + | Supplies/Inventory | + | Equipment | = | Payable | + | Payable | + | Capital | – | Drawing | + | Revenue | – | Expenses | Titles | Assets | Liab + Equity | Difference |
| 1-Dec | 3,000 | 15,000 | = | 18,000 | 18,000 | 18,000 | 0 | ||||||||||||||||
| balance | 3,000 | – | – | 15,000 | = | – | – | 18,000 | – | – | 18,000 | 18,000 | 0 | ||||||||||
| 2 | (600) | 600 | = | – | – | 0 | |||||||||||||||||
| balance | 2,400 | – | 600 | 15,000 | = | – | – | 18,000 | – | – | – | 18,000 | 18,000 | 0 | |||||||||
| 3 | (500) | – | = | – | – | – | – | – | (500) | rent | (500) | (500) | 0 | ||||||||||
| balance | 1,900 | – | 600 | 15,000 | = | – | – | 18,000 | – | – | (500) | 17,500 | 17,500 | 0 | |||||||||
| 4 | 1,200 | = | 1,200 | 1,200 | 1,200 | 0 | |||||||||||||||||
| bal | 1,900 | – | 600 | 16,200 | = | 1,200 | – | 18,000 | – | – | (500) | 18,700 | 18,700 | 0 | |||||||||
| 15 | 825 | = | 825 | – | 825 | 825 | 0 | ||||||||||||||||
| bal | 2,725 | – | 600 | 16,200 | = | 1,200 | – | 18,000 | – | 825 | (500) | 19,525 | 19,525 | 0 | |||||||||
| 16 | 100 | = | 100 | – | 100 | 100 | 0 | ||||||||||||||||
| bal | 2,725 | 100 | 600 | 16,200 | = | 1,200 | – | 18,000 | – | 925 | (500) | 19,625 | 19,625 | 0 | |||||||||
| 17 | 100 | (100) | = | – | – | 0 | |||||||||||||||||
| bal | 2,825 | – | 600 | 16,200 | = | 1,200 | – | 18,000 | – | 925 | (500) | 19,625 | 19,625 | 0 | |||||||||
| 18 | (125) | = | (125) | salaries | (125) | (125) | 0 | ||||||||||||||||
| bal | 2,700 | – | 600 | 16,200 | = | 1,200 | – | 18,000 | – | 925 | (625) | 19,500 | 19,500 | 0 | |||||||||
| 31 | 930 | = | – | 930 | – | 930 | 930 | 0 | |||||||||||||||
| bal | 3,630 | – | 600 | 16,200 | = | 1,200 | – | 18,000 | – | 1,855 | (625) | 20,430 | 20,430 | 0 | |||||||||
| 31 | (400) | = | (400) | – | (400) | (400) | 0 | ||||||||||||||||
| bal | 3,230 | – | 600 | 16,200 | = | 800 | – | 18,000 | – | 1,855 | (625) | 20,030 | 20,030 | 0 | |||||||||
| 31 | (900) | = | – | (900) | – | – | (900) | (900) | 0 | ||||||||||||||
| bal | 2,330 | – | 600 | 16,200 | = | 800 | – | 18,000 | (900) | 1,855 | (625) | 19,130 | 19,130 | 0 | |||||||||
| – | = | – | – | – | – | – | |||||||||||||||||
| = | |||||||||||||||||||||||
| Net Income = Revenue minus Expenses | |||||||||||||||||||||||
| a. Dec. 1Worthy invested $3,000 cash and $15,000 of equipment in Expressions. | |||||||||||||||||||||||
| b. Dec. 2Expressions paid $600 cash for supplies for the shop. | Revenue | 1000 | 1000 | ||||||||||||||||||||
| c. Dec. 3Expressions paid $500 cash to rent space in a strip mall for December. | minus | Expense | 100 | 300 | |||||||||||||||||||
| d. Dec. 4Purchased $1,200 of equipment on credit (recorded as accounts payable). | = | Net Income | 900 | 700 | |||||||||||||||||||
| e. Dec. 15Expressions opened for business on December 5. Cash received from haircutting services in the first week and a half of business (ended December 15) was $825. | |||||||||||||||||||||||
| f. Dec. 16Expressions provided $100 of haircutting services on credit. | |||||||||||||||||||||||
| g. Dec. 17Expressions received a $100 check for services previously rendered on credit. | |||||||||||||||||||||||
| h. Dec. 18Expressions paid $125 cash to an assistant for hours worked for the grand opening. | |||||||||||||||||||||||
| i. Dec. 31Cash received from services provided during the second half of December was $930. | |||||||||||||||||||||||
| j. Dec. 31Expressions paid $400 cash toward the accounts payable from December 4. | |||||||||||||||||||||||
| k. Dec. 31Worthy made a $900 cash withdrawal from Expressions for personal use. |
"We Do" Example IP1
| Template | WE DO | ||||||||||||||||||||
| Assets | = | Liabilities | + | Owner's Equity | Balance Check | ||||||||||||||||
| Accounts | Accounts | Notes | Service |
