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Question
part four—determining how transactions change an accounting equation
continue to record transactions for arellano consulting services, using the accounts shown in the following accounting equation. use the form below to record the following transactions. use a plus sign (+) to indicate an increase and a minus sign (-) to indicate a decrease. calculate new balances for all accounts after each transaction.
transactions
- paid cash for supplies, $750.00.
- paid cash for rent, $1,100.00.
- paid cash to owner for personal use, $1,500.00.
- paid cash for telephone bill, $250.00.
- received cash on account from jones computers, $2,000.00.
| transaction no. | assets | = liabilities + owners equity | ---- | ---- | ---- | cash + accts. rec. jones computers + supplies + prepaid insurance | = accts. pay. lees supplies + claudia arellano, capital | beg. bal. | $11,500 $3,500 $1,600 $5,000 | $600 $21,000 | 7 | new bal. | 8 | new bal. | 9 | new bal. | 10 | new bal. | 11 | new bal. |
Step1: Record Transaction 7
Cash: $\$11,500 - \$750 = \$10,750$
Supplies: $\$1,600 + \$750 = \$2,350$
New Balances: Cash = $\$10,750$, Accts. Rec. Jones Computers = $\$3,500$, Supplies = $\$2,350$, Prepaid Insurance = $\$5,000$, Accts. Pay. Lee's Supplies = $\$600$, Claudia Arellano, Capital = $\$21,000$
Step2: Record Transaction 8
Cash: $\$10,750 - \$1,100 = \$9,650$
Claudia Arellano, Capital: $\$21,000 - \$1,100 = \$19,900$
New Balances: Cash = $\$9,650$, Accts. Rec. Jones Computers = $\$3,500$, Supplies = $\$2,350$, Prepaid Insurance = $\$5,000$, Accts. Pay. Lee's Supplies = $\$600$, Claudia Arellano, Capital = $\$19,900$
Step3: Record Transaction 9
Cash: $\$9,650 - \$1,500 = \$8,150$
Claudia Arellano, Capital: $\$19,900 - \$1,500 = \$18,400$
New Balances: Cash = $\$8,150$, Accts. Rec. Jones Computers = $\$3,500$, Supplies = $\$2,350$, Prepaid Insurance = $\$5,000$, Accts. Pay. Lee's Supplies = $\$600$, Claudia Arellano, Capital = $\$18,400$
Step4: Record Transaction 10
Cash: $\$8,150 - \$250 = \$7,900$
Claudia Arellano, Capital: $\$18,400 - \$250 = \$18,150$
New Balances: Cash = $\$7,900$, Accts. Rec. Jones Computers = $\$3,500$, Supplies = $\$2,350$, Prepaid Insurance = $\$5,000$, Accts. Pay. Lee's Supplies = $\$600$, Claudia Arellano, Capital = $\$18,150$
Step5: Record Transaction 11
Cash: $\$7,900 + \$2,000 = \$9,900$
Accts. Rec. Jones Computers: $\$3,500 - \$2,000 = \$1,500$
New Balances: Cash = $\$9,900$, Accts. Rec. Jones Computers = $\$1,500$, Supplies = $\$2,350$, Prepaid Insurance = $\$5,000$, Accts. Pay. Lee's Supplies = $\$600$, Claudia Arellano, Capital = $\$18,150$
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| Transaction No. | Cash | Accts. Rec. Jones Computers | Supplies | Prepaid Insurance | Accts. Pay. Lee's Supplies | Claudia Arellano, Capital |
|---|---|---|---|---|---|---|
| 7 New Bal. | $10,750 | $3,500 | $2,350 | $5,000 | $600 | $21,000 |
| 8 New Bal. | $9,650 | $3,500 | $2,350 | $5,000 | $600 | $19,900 |
| 9 New Bal. | $8,150 | $3,500 | $2,350 | $5,000 | $600 | $18,400 |
| 10 New Bal. | $7,900 | $3,500 | $2,350 | $5,000 | $600 | $18,150 |
| 11 New Bal. | $9,900 | $1,500 | $2,350 | $5,000 | $600 | $18,150 |