Question

March 1 M. Acher invests $70,000 cash to start the business.

March 3 Purchased three pieces of equipment for $160,000, paying $50,000 cash and signing a 5-year, 10% note for the remainder.
March 5 Purchased $5,000 supplies on credit.
MarchlO Cash revenue amounted to $7,000.
March 15 Paid $500 cash for radio advertising.
March 20 Paid $800 on account for supplies purchased on March 5.
March 22 Owner withdrew $2,100 from the business for personal expenses.
March 29 Paid $1,200 cash for rent for the current month.
March 30 Received $2,000 cash advance from a customer for future copying.
March 31 Billed a customer for $575 for photocopy work done.

Requirements:

1) Make a tabular analysis of the transactions on accounting equation. Use the following column headings: cash, Supplies, accounts receivable, equipment, accounts payable, notes payable, unearned service revenue, capital, withdrawal, revenues, expenses.

Answer 1

The question deals with creating a tabular analysis of various business transactions and their effects on the accounting equation. This analysis requires recording the impact of each transaction under appropriate accounting categories, affecting assets, liabilities, and equity.

Step-by-step explanation:

The student's question involves creating a tabular analysis of the transactions on the accounting equation for a series of events that have occurred within a business. To complete this analysis, each transaction must be recorded against the relevant accounting categories such as cash, supplies, accounts receivable, equipment, accounts payable, notes payable, unearned service revenue, capital, withdrawal, revenues, and expenses. For each transaction, the impact on the accounting equation (Assets = Liabilities + Equity) must be considered, recording increases and decreases across the mentioned categories.

For instance, when M. Acher invests $70,000 cash to start the business, this increases the cash account and also the owner's capital account, reflecting equity. When equipment is purchased, the equipment account increases while cash decreases and a note payable is created for the balance. In cases where services are rendered or received, revenue or expenses are recognized accordingly, affecting the profit and loss elements of the equation.