Reference no: EM132418783
Problem: The WHOLESOME Company buys and sells organic food items. It has a retail store and sells online. The business is privately owned by two partners who together invested $475,000 to start the business last year.
The Company has the following assets and liabilities at August 31:
Delivery Trucks?$50,000?Supplies?$75,000?
Accounts Receivable?$45,000?Bank/Cash?$75,000
Accounts Payable?$35,000?Bank Loan?$10,000
1. Calculate the Owner's Equity as at August 31 using the accounting equation, clearly showing the total assets and total liabilities of the WHOLESOME Company. (TIP #1: to calculate the Owners Equity you will need to FIRST calculate the Balance Sheet - remember IEBC? TIP #2: the business must have cumulatively made a big loss to get the Balance Sheet to err....balance).
2. In September, the WHOLESOME Company pays a $10,000 vendor bill (that was on Accounts Payable) - what is the debit and what is the credit to record this transaction?
3. In September, the WHOLESOME Company pays a $5,000 repair bill on one of the Delivery Trucksimmediately by company check - what is the debit and what is the credit to record this transaction?
4. In September, the WHOLESOME Company purchases $10,000 worth of Supplies on account - what is the debit and what is the credit to record this transaction?
5. In September, both partners withdraw $10,000 each from their original investment - what is the debit and what is the credit to record this transaction?