Reference no: EM133000635

Analyzing the effects of transactions on the accounting equation

Cash $61,000

Accounts Payable $11,200

Maurice Dickey is a painting contractor who specializes in painting commercial buildings. At the beginning of June, his firm's financial records showed the following assets, liabilities, and owner's equity.

Accounts Receivable $16,600                Maurice Dickey, Capital $91,500

Office Furniture $35,800                          Revenue $58,600

Auto $23,500                                              Expenses $24,400

INSTRUCTIONS Set up an accounting 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 $6,680 on credit.

2. Paid $1,700 in cash for new office chairs.

3. Received $11,200 in cash from credit clients.

4. Paid $880 in cash for telephone service.

5. Sent a check for $4,500 in partial payment of the amount due creditors.

6. Paid salaries of $9,700 in cash.

7. Sent a check for $1,120 to pay the electric bill.

8. Performed services for $10,500 in cash.

9. Paid $2,350 in cash for auto repairs.

10. Performed services for $12,500 on account.

Problem 1: Analyze: What is the amount of total assets after all transactions have been recorded?