Reference no: EM133025790

Gail Masters recently started a business, Masters Events that will provide promotion and advertising for fund raising events hosted by charities. She will operate the business as a proprietorship. The first month's transactions are listed below:

 

1. Gail invests $5,000 in the business out of her personal savings.

 

2. Gail transfers a computer valued at $3,000 to the business.

 

3. Purchases computer supplies for $400 cash.

 

4. Pays $550 for wages to an assistant.

 

5. Completes advertising brochures for a client, who pays $700 for the service.

 

6. Advertisements for Masters Events are run in the local newspaper at a cost of $600 on account.

 

7. Provides services totaling $1,200 for several clients - one client whose bill is $200 pays cash, the remainder are on account.

 

8. Pays the amount owing to the newspaper for the advertisements described in 6.

 

9. Half the amount receivable from customers is collected.

 

10. Purchases additional computer equipment for $450, cash.

 

11. Amanda withdraws $300 for personal use.

 

Instructions

 

a) For each of the above items, record each transaction in the table provided. HINT: parts (b) - (f) must be calculated from table Totals

 

b) Calculate total assets.

 

c) Calculate total liabilities.

 

d) Calculate profit.

 

e) Calculate owner's equity.

 

f) Demonstrate that the accounting equation is in balance.

Trans- action	Cash	A/R	Supplies	Computer equipment	Accounts payable	G. Masters, Capital	G. Masters, Drawings	Revenue	Expenses
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Totals