Selected Transactions Completed By A Proprietorship Are Described Below

Name: __Talal Kanoo______Date:______

Problem #1

Selected transactions completed by a proprietorship are described below. Indicate the effects of each transaction on assets, liabilities, and owner's equity by inserting "+" for increase and "-" for decrease in the appropriate columns at the right. If appropriate, you may insert more than one symbol in a column. A L OE (a) Received cash from owner as an additional investment + (b) Purchased supplies on account - (c) Paid rent for the current month - (d) Received cash for services sold to customers + (e) Returned some defective supplies purchased in (b) + (f) Paid insurance premiums in advance - (g) Paid cash to creditor for purchases in (b) - + (h) Charged customers for services sold on account + (j) Received cash on account from customers + (k) Owner withdrew cash for personal use + - (m) Received invoice for electricity used (n) Paid wages + - (o) Purchased a truck for cash - Problem # 2

Henry’s Taxes, a tax preparation business had the following transactions during the month of April: Example: Received cash the owner Henry, $15,000. 1. Received cash for providing accounting services, $8,000. 2. Billed customers on account for providing services, $4,000. 3. Paid advertising expense, $400. 4. Received cash from customers on account, $3,500. 5. Owner made a withdrawal, $1,000. 6. Received telephone bill, $100. 7. Paid telephone bill, $100.

Required: 1) In the table below, state the accounts affected by each transaction. 2) Indicate the effect on the accounting equation of each transaction. Assets = Liabilities + Owner’s Equity Ex. Cash +15,000 +15,000 1.+8,000 +8000 2. -4,000 -4,000 3. -400 -400 4.+3,500 +3,500 5.-1,000 -1000 6. +100 -100 7.-100 +100 Problem # 3

Journalize the following selected transactions for August 2008 in a two-column journal. Journal entry explanations may be omitted.

Aug 1 Received cash from the investment made by the owner, Geoff Smith, $15,000. 2 Received cash for providing accounting services, $8,000. 3 Billed customers on account for providing services, $4,000. 4 Paid advertising expense, $400. 5 Received cash from customers on account, $3,500. 6 Geoff Smith, owner, withdraws, $1,000 7 Received telephone bill, $100 8 Paid telephone bill, $100.

Date Description Post Ref Debit Credit Aug 1 Cash 15000 Capital 15000

Aug 2 Cash 8000 Professional Fees (revenue) 8000

Aug 3 Account receivable 4,000 Professional Fees 4,000

Aug 4 Expense 400 Cash 400

Aug 5 Account receivable 3500 Sales 3500

Aug 6 Drawing 1000 Cash 1000

Aug 7 Account payable (liabilities) 100 Cash 100

Aug 8 Utilities expense 100 Cash 100