# EFFECT OF TRANSACTIONS ON ACCOUNTING EQUATION Jay Pembroke started a business. During the first month (April 20--), the following transactions occurred. (a) Invested cash in business, \$18,000. (b) Bought office supplies for \$4,600: \$2,000 in cash and \$2,600 on account. (c) Paid one-year insurance premium, \$1,200. (d) Earned revenues totaling \$3,300: \$1,300 in cash and \$2,000 on account. (e) Paid cash on account to the company that supplied the office supplies in transaction (b), \$2,300. (f) Paid office rent for the month, \$750. (g) Withdrew cash for personal use, \$100. REQUIRED Show the effect of each transaction on the individual accounts of the expanded accounting equation: Assets = Liabilities + Owner’s Equity (Capital − Drawing + Revenues − Expenses) . After transaction (g), report the totals for each element. Demonstrate that the accounting equation has remained in balance. STATEMENT OF OWNER’S EQUITY Based on Problem 2-9A, prepare a statement of owner’s equity for Jay Pembroke for the month of April 20--.

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

#### Solutions

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Chapter 2, Problem 11SPA
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