Tobias Eaden started a sole proprietorship named Sky High Ads. A customer's message can be displayed on an airplane banner across the city. Sky High Ads had the following business activities during the month of November 2020: Nov 1 Invested $200,000 cash and aircraft equipment with a $50, 000 fair value in a new sole proprietorship named Sky High Ads. 3 Purchased land and a small office building. The land was worth $400,000, and the building was worth $100, 000. The purchase price was paid with $125,000 cash and a long-term note payable for the balance. 7 Eaden transferred title of his personal airplane to the business. The airplane had a value of $200,000 and was to be used exclusively in the business. 9 Purchased $5,000 of supplies on credit. 13 Provided services to a customer for a marriage proposal of $16,000 on credit. 17 Paid $3,000 wages to a pilot. 21 Signed an advertising contract to commence in January. A deposit of $250 must be paid by December 15. 23 Paid for half of the account payable from the November 9 transaction. 27 Purchased $20,000 of new aircraft equipment by paying $15, 000 cash and trading in old aircraft equipment with a recorded cost of $5,000. 30 withdrew $3,200 cash from the business for personal use. Required: 1&2. Record the effects of the transactions by entering debits and credits directly in the T-accounts. Identify the date next to each posting.
Tobias Eaden started a sole proprietorship named Sky High Ads. A customer's message can be displayed on an airplane banner across the city. Sky High Ads had the following business activities during the month of November 2020: Nov 1 Invested $200,000 cash and aircraft equipment with a $50, 000 fair value in a new sole proprietorship named Sky High Ads. 3 Purchased land and a small office building. The land was worth $400,000, and the building was worth $100, 000. The purchase price was paid with $125,000 cash and a long-term note payable for the balance. 7 Eaden transferred title of his personal airplane to the business. The airplane had a value of $200,000 and was to be used exclusively in the business. 9 Purchased $5,000 of supplies on credit. 13 Provided services to a customer for a marriage proposal of $16,000 on credit. 17 Paid $3,000 wages to a pilot. 21 Signed an advertising contract to commence in January. A deposit of $250 must be paid by December 15. 23 Paid for half of the account payable from the November 9 transaction. 27 Purchased $20,000 of new aircraft equipment by paying $15, 000 cash and trading in old aircraft equipment with a recorded cost of $5,000. 30 withdrew $3,200 cash from the business for personal use. Required: 1&2. Record the effects of the transactions by entering debits and credits directly in the T-accounts. Identify the date next to each posting.
Chapter3: Analyzing And Recording Transactions
Section: Chapter Questions
Problem 2Q: State the accounting equation, and explain what each part represents.
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Question
Transcribed Image Text:3. Prove the accounting equation.
Assets
= Liabilities
Equity
+
Transcribed Image Text:Tobias Eaden started a sole proprietorship named Sky High Ads. A customer's message can be displayed on an airplane banner
across the city. Sky High Ads had the following business activities during the month of November 2020:
Nov 1 Invested $200,000 cash and aircraft equipment with a $50, 000 fair value in a new sole
proprietorship named Sky High Ads.
3 Purchased land and a small office building. The land was worth $400,000, and the building
was worth $100,000. The purchase price was paid with $125,000 cash and a long-term note
payable for the balance.
7 Eaden transferred title of his personal airplane to the business. The airplane had a
value of $200,000 and was to be used exclusively in the business.
9 Purchased $5,000 of supplies on credit.
13 Provided services to a customer for a marriage proposal of $16,000 on credit.
17 Paid $3, 000 wages to a pilot.
21 Signed an advertising contract to commence in January. A deposit of $250 must be paid by
December 15.
23 Paid for half of the account payable from the November 9 transaction.
27 Purchased $20,000 of new aircraft equipment by paying $15,000 cash and trading in old
aircraft equipment with a recorded cost of $5,000.
30 Withdrew $3,200 cash from the business for personal use.
Required:
1&2. Record the effects of the transactions by entering debits and credits directly in the T-accounts. Identify the date next to each
posting.
Cash
Accounts Receivable
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