Question

Effects of Transactions (Revenue, Expense, Withdrawals)

Assume John Sullivan completed the following additional transactions during February
(e) Received cash from a client for professional services, $1,310.
() Paid office rent for February, $500.
(9) Paid February phone bill, $74.
(h) Withdrew cash for personal use, $1,100.
(1) Performed services for clients on account, $950.
6) Paid wages to part-time employee, $1,400.
(k) Received cash for services performed on account in transaction (i), $450. (Enter the change in Cash on the first line and the change in other account
on the second line.)
Show the effect of each transaction on the basic elements of the expanded accounting equation: Assets - Llabilities + Owner's Equity (Capital - Drawing
+ Revenues - Expenses). Use the minus sign to indicate a decrease or reduction in the account. After transaction (k), report the totals for each element.
If an amount box does not require an entry, leave it blank.
Owner's Equity
Drawing + Revenues
Assets
+
Expenses
Description
Liabilities
6,000
Capital
27,000
Bal.
33,000
Service fees
Rent expense
(0)
(9)
Phone expense
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4:09 PM
12/14/2021

Answer 1

The effects of the transactions on the basic elements of the expanded accounting equation are analyzed. The transactions include receiving cash for services, paying expenses, withdrawing cash for personal use, and performing services on account. After all the transactions, the totals for assets, liabilities, and owner's equity are provided.

Step-by-step explanation:

The effects of the given transactions on the basic elements of the expanded accounting equation can be analyzed as follows:

1. Received cash from a client for professional services, $1,310: This transaction increases the Cash asset account by $1,310 and increases the Revenues account by $1,310.
2. Paid office rent for February, $500: This transaction decreases the Cash asset account by $500 and decreases the Expenses account (specifically Rent expense) by $500.
3. Paid February phone bill, $74: This transaction decreases the Cash asset account by $74 and decreases the Expenses account (specifically Phone expense) by $74.
4. Withdrew cash for personal use, $1,100: This transaction decreases the Cash asset account by $1,100 and decreases the Owner's Equity account (specifically Drawing) by $1,100.
5. Performed services for clients on account, $950: This transaction increases the Account Receivable asset account by $950 and increases the Revenues account by $950.
6. Paid wages to part-time employee, $1,400: This transaction decreases the Cash asset account by $1,400 and decreases the Expenses account (specifically Wages expense) by $1,400.
7. Received cash for services performed on account in transaction (i), $450: This transaction increases the Cash asset account by $450 and decreases the Account Receivable asset account by $450.

After transaction (k), the totals for each element of the expanded accounting equation are:

• Assets: $1,986
• Liabilities: $0
• Owner's Equity: $33,810