Effects of Business Transactions on the Accounting Equation
• Assets = Liabilities + Owner’s Equity • 1、Jan.20，Michael McBryan started the business 、 ， by depositing $80,000 received from the sale of capital stock in a company bank account. • 2、Jan.21，Purchased land for $52,000，paying 、 ， ， cash. • 3、Jan.22，Purchased a building for $36,000， 、 ， ， paying $6,000 in cash and issuing a note payable for the remaining $30,000. • 4、Jan.23，Purchased tools and equipment on 、 ， account，$13,800. ，
• • • • •ction Assets = Liabilities + Owner’s Equity 1、Jan.20 $80,000 $80,000 、 2、Jan.21 、 $52,000 $(52,000) 3、Jan.22 $36,000 $30,000 、 $(6,000) 4、Jan.23 $13,800 $13,800 、 5、Jan.24 $1,800 $1,800 、 6、Jan.26 $6,00 、 $(600) 7、Jan.27 $6,800 $6,800 、 8、Jan.31 $2,200 $2,200 、 9、Jan.31 $1,400 $1,400 、
Match
• • • • • 1）Financial accounting ） 2）Management accounting ） 3）Financial reports ） 4）Business entity ） 5）Bookkeeping ）
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The procedural aspect of accounting that includes recording the routine transactions and day-to-day record keeping of an enterprise. Bookkeeping The area of accounting that refers to providing information to support internal Management management decisions. Accounting A broad term that describes all Business Financial information provided to external users， ， Entity Reports including but not limited to financial statements. Financial Accounting The area of accounting that refers to providing information to support external investment and credit decisions. An economic unit that controls resources， ， incurs obligations，and engages in ，
• Exercise 3：Account balance for Crystal Auto ： Wash at September 30,2005，are shown below. ， The figure for retained earnings is not given，but ， it can be determined when all the available information is assembled in the form of a balance sheet. Please prepare a balance sheet at Sep. 30， ， 2005.
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• Crystal Auto Wash • Balance Sheet • September 30，2005 ， Assets Liabilities and Owner’s Equity Current Assets Current Liabilities Cash $9,200 Notes Payable $29,000 Accounts Receivable $800 Accounts Payable $14,000 Supplies $400 Salaries Payable $3,000 Total Current Assets $10,400 Total Current Liabilities $46,000 Long-Term Assets Owner’s Equity Land $68,000 Capital Stock $100,000 Buildings Retained Earnings $49,400 Machinery & $52,000 Equipment $65,000 Total Liabilities Total Assets $195,400 and Owner’s Equity $195,400
Prepare an Balance Sheet
• • • • • • • • • • • Accounts Payable………… $14,000 Land……………………….. $68,000 Accounts Receivable……… $800 Machinery & Equipment…. $65,000 Buildings…………………… $52,000 Notes Payable……………… $29,000 Cash…………………………$9,200 Salaries Payable……………$3,000 Capital Stock………………..$100,000 Supplies………………………$400 Retained Earnings…………...???
• 5、Jan.24，Sold some of the tools at a price 、 ， equal to their cost，$1,800，collectible ， ， within 45days. • 6、Jan.26，Received $600 in partial 、 ， collection of the account receivable from the sale of tools. • 7、Jan.27，Paid $6,800 in partial payment of 7、Jan.27， an account payable. • 8、Jan.31，Recorded $2,200 of sales 、 ， revenue received in cash. • 9、Jan.31，Paid $1,400 of operating 、 ， expenses in cash — $200 for utilities and $1,200 for wages.