affecting the capital account that does not affect profit. 2. What was the change in the Cash account for the month? In Galang, Capital? Nine transactions are reflected in the October transaction worksheet of the Teresita Galang Financial Planner presented below: Teresita Galang Financial Planner Financial Transaction Worksheet Month of October 2018 OE %3D Galang, Capital + Supplies Office Accounts %3D Cash Accounts Receivable Equipment Payable P 4,500 P 153,000 P 60,000 P 130,000 P 17,500 (7,000) %3D P 15,000 7,000 (5,000) Bal. %3D %3D 2 5,000 25,000 25,000 %3D 3 24,500 %3D 4 24,500 (16,000) 16,000 (6,500) 3,700 5 (6,500) %3D 7 3,700 (2,500) (5,000) P 131,000 8 (2,500) (5,000) P 3,000 P 178,000 P 98,200 %3D P 35,000 P 13,200 P 229,200 P 229,200 %3D Required: 1. Describe each of the above transactions. The last transaction is the only transaction affecting the capital account that does not affect profit.

affecting the capital account that does not affect profit. 2. What was the change in the Cash account for the month? In Galang, Capital? Nine transactions are reflected in the October transaction worksheet of the Teresita Galang Financial Planner presented below: Teresita Galang Financial Planner Financial Transaction Worksheet Month of October 2018 OE %3D Galang, Capital + Supplies Office Accounts %3D Cash Accounts Receivable Equipment Payable P 4,500 P 153,000 P 60,000 P 130,000 P 17,500 (7,000) %3D P 15,000 7,000 (5,000) Bal. %3D %3D 2 5,000 25,000 25,000 %3D 3 24,500 %3D 4 24,500 (16,000) 16,000 (6,500) 3,700 5 (6,500) %3D 7 3,700 (2,500) (5,000) P 131,000 8 (2,500) (5,000) P 3,000 P 178,000 P 98,200 %3D P 35,000 P 13,200 P 229,200 P 229,200 %3D Required: 1. Describe each of the above transactions. The last transaction is the only transaction affecting the capital account that does not affect profit.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter2: Analyzing Transactions: The Accounting Equation

Section: Chapter Questions

Problem 4SEB: EFFECTS OF TRANSACTIONS (BALANCE SHEET ACCOUNTS) Jon Wallace started a business. During the first...

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EFFECTS OF TRANSACTIONS (BALANCE SHEET ACCOUNTS) Jon Wallace started a business. During the first month (March 20--), the following transactions occurred. Show the effect of each transaction on the accounting equation: Assets= Liabilities + Owners Equity. After each transaction, show the new account totals. (a) Invested cash in the business, 30,000. (b) Bought office equipment on account, 4,500. (c) Bought office equipment for cash, 1,600. (d) Paid cash on account to supplier in transaction (b), 2,000. EFFECTS OF TRANSACTIONS (REVENUE, EXPENSE, WITHDRAWALS) This exercise is an extension of Exercise 2-3B. Lets assume Jon Wallace completed the following additional transactions during March. Show the effect of each transaction on the basic elements of the expanded accounting equation: Assets = Liabilities + Owners Equity (Capital Drawing + Revenues Expenses). After transaction (k), report the totals for each element. Demonstrate that the accounting equation has remained in balance. (e) Performed services and received cash, 3,000. (f) Paid rent for March, 1,000. (g) Paid March phone bill, 68. (h) Jon Wallace withdrew cash for personal use, 800. (i) Performed services for clients on account, 900. (j) Paid wages to part-time employee, 500. (k) Received cash for services performed on account in transaction (i), 500.
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Journal entries and trial balance On October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month: a. Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, 40,000. b. Paid rent on office and equipment for the month, 4,800. c. Purchased supplies on account, 2,150. d. Paid creditor on account, 1,100. e. Earned sales commissions, receiving cash, 18,750. f. Paid automobile expenses (including rental charge) for month, 1,580, and miscellaneous expenses, 800. g. Paid office salaries, 3,500. h. Determined that the cost of supplies used was 1,300. i. Paid dividends, 1,500. Instructions 1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Explanations may be omitted. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of October 31, 20Y6. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for October. 5. Determine the increase or decrease in retained earnings for October.