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Problem 1 On February 1, 2019, Diane Winn established a business to manage rental property. She completed the following transactions đuring February: a. Opened a business bank account with a deposit of $30,000.00 b. Purchased supplies on account, $1,250.00 c. Received cash from fdees eamed, $5,500.00 d. Paid rent on Offce an d Equipment for the month, $3,300.00 e. Paid creditors on account, $575.00 f. Billed customers for fees eamed, $3,250.00 Paid automobile expenses for month, $980.00, and miscellaneous expenses, $775.00 h. Paid Office Salaries $1,500.00 i. Detemined that the cost of supplies on hand was S315.00; therefore, the cost of supplies used was $935.00. j. Withdrew cash for personal use, $1,000.00 Instructions: 1 Indicate the effect of each transaction and the balances after each transactions, using the followings equation: Owner's Assets Liabilities Equity Accounts Accounts Diane Winn, Cash + Receivable Supplies Payables + Capital Comments a. b. C. d. e. i. j. k. Briefly explain why the owner's investment and revenues increased owner's equity, while withdrawals and expenses decreased owner's 2 equity

Problem 1 On February 1, 2019, Diane Winn established a business to manage rental property. She completed the following transactions đuring February: a. Opened a business bank account with a deposit of $30,000.00 b. Purchased supplies on account, $1,250.00 c. Received cash from fdees eamed, $5,500.00 d. Paid rent on Offce an d Equipment for the month, $3,300.00 e. Paid creditors on account, $575.00 f. Billed customers for fees eamed, $3,250.00 Paid automobile expenses for month, $980.00, and miscellaneous expenses, $775.00 h. Paid Office Salaries $1,500.00 i. Detemined that the cost of supplies on hand was S315.00; therefore, the cost of supplies used was $935.00. j. Withdrew cash for personal use, $1,000.00 Instructions: 1 Indicate the effect of each transaction and the balances after each transactions, using the followings equation: Owner's Assets Liabilities Equity Accounts Accounts Diane Winn, Cash + Receivable Supplies Payables + Capital Comments a. b. C. d. e. i. j. k. Briefly explain why the owner's investment and revenues increased owner's equity, while withdrawals and expenses decreased owner's 2 equity

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 1 On February 1, 2019, Diane Winn established a business to manage rental property. She completed the following transactions đuring February: a. Opened a business bank account with a deposit of $30,000.00 b. Purchased supplies on account, $1,250.00 c. Received cash from fdees eamed, $5,500.00 d. Paid rent on Offce an d Equipment for the month, $3,300.00 e. Paid creditors on account, $575.00 f. Billed customers for fees eamed, $3,250.00 Paid automobile expenses for month, $980.00, and miscellaneous expenses, $775.00 h. Paid Office Salaries $1,500.00 i. Detemined that the cost of supplies on hand was S315.00; therefore, the cost of supplies used was $935.00. j. Withdrew cash for personal use, $1,000.00 Instructions: 1 Indicate the effect of each transaction and the balances after each transactions, using the followings equation: Owner's Assets Liabilities Equity Accounts Accounts Diane Winn, Cash + Receivable Supplies Payables + Capital Comments a. b. C. d. e. i. j. k.
Transcribed Image Text:Problem 1 On February 1, 2019, Diane Winn established a business to manage rental property. She completed the following transactions đuring February: a. Opened a business bank account with a deposit of $30,000.00 b. Purchased supplies on account, $1,250.00 c. Received cash from fdees eamed, $5,500.00 d. Paid rent on Offce an d Equipment for the month, $3,300.00 e. Paid creditors on account, $575.00 f. Billed customers for fees eamed, $3,250.00 Paid automobile expenses for month, $980.00, and miscellaneous expenses, $775.00 h. Paid Office Salaries $1,500.00 i. Detemined that the cost of supplies on hand was S315.00; therefore, the cost of supplies used was $935.00. j. Withdrew cash for personal use, $1,000.00 Instructions: 1 Indicate the effect of each transaction and the balances after each transactions, using the followings equation: Owner's Assets Liabilities Equity Accounts Accounts Diane Winn, Cash + Receivable Supplies Payables + Capital Comments a. b. C. d. e. i. j. k.
Briefly explain why the owner's investment and revenues increased owner's equity, while withdrawals and expenses decreased owner's 2 equity
Transcribed Image Text:Briefly explain why the owner's investment and revenues increased owner's equity, while withdrawals and expenses decreased owner's 2 equity
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