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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

P. Schwartz, Attorney at Law, opened his office on October 1. The account headings are presented below. Transactions completed during the month follow.

images

  1. a. Schwartz deposited $25,000 in a bank account in the name of the business.
  2. b. Bought office equipment on account from QuipCo, $9,670.
  3. c. Schwartz invested his personal law library, which cost $2,800.
  4. d. Paid the office rent for the month, $1,700, Ck. No. 2000.
  5. e. Bought office supplies for cash, $418, Ck. No. 2001.
  6. f. Bought insurance for two years, $944, Ck. No. 2002.
  7. g. Sold legal services for cash, $8,518.
  8. h. Paid the salary of the part-time receptionist, $1,820, Ck. No. 2003.
  9. i. Received and paid the telephone bill, $388, Ck. No. 2004.
  10. j. Received and paid the bill for utilities, $368, Ck. No. 2005.
  11. k. Sold legal services for cash, $9,260.
  12. l. Paid on account to QuipCo, $2,670, Ck. No. 2006.
  13. m. Schwartz withdrew cash for personal use, $2,500, Ck. No. 2007.

Required

  1. 1. Record the transactions and the balance after each transaction.
  2. 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.

1.

To determine

Record the figures in the given transactions for the respective accounts, and balance the figures after recording every transaction.

Explanation

Transaction: The economic events which bring about any changes in the financial items of a business and can be measured in the monetary units is referred to as a transaction.

Accounting equation: Accounting equation is a concept expressed in the form of equation, which creates a relation between resources or assets of a company and claims of resources to creditors and owners. Fundamental accounting equation is expressed as shown below:

Assets = Liabilities + Owners' EquityAssets = Liabilities+{(Owners' Capital

2.

To determine

Sum the balances of accounts to verify whether the balances on left side and on the right side in the accounting equation are equal.

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