Effect of Transaction on Accounting Equation
Jay pembroke started a buiness. During the first month (April 20--), the following tranactions occured.
a) Invested cash in buiness, 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 us 100
Total cash follow (g) 12,950
Show the effect of 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. Demonstarte that the accounting equation has remained in balance.