Accounting Equation Transactions Analysis

Assets = Liabilities + Owner Equity

Transactions Analysis (2)

Transaction (1). Investment By Owner Ali decides to open a computer programming service which he names New horizon. On September 1, 2010, he invests $15,000 cash . Transaction (2). Purchase of Equipment for Cash. New horizon purchases computer equipment for $7,000 cash. Transaction (3). Purchase of Supplies on Credit. New horizon purchases for $1,600 from Acme Supply Company computer paper and other supplies expected to last several months. Transaction (4). Services Provided for Cash. New horizon receives $1,200 cash from customers for programming services it has provided Transaction (5). Purchase of Advertising on Credit. New horizon receives a bill for $250 from the Daily News for advertising but postpones payment until a later date Transaction (6). Services Provided for Cash and Credit. New horizon provides $3,500 of programming services for customers. The company receives cash of $1,500 from customers, and it bills the balance of $2,000 on account Transaction (7). Payment of Expenses. New horizon pays the following Expenses in cash for September: store rent $600, salaries of employees $900, and utilities $200. Transaction (8). Payment of Accounts Payable. New horizon pays its $250 Daily News bill in cash. Transaction (9). Receipt of Cash on Account. New horizon receives $600 in cash from customers who had been billed for services [in Transaction (6)].

Transaction (10). Withdrawal of Cash by Owner. Ali withdraws $1,300 in cash from the business for his personal use.

Transactions Analysis (1)

On November 1, 2011, Chris Clark deposited $25,000 in a bank account in the name of NetSolutions

On November 5, 2011, NetSolutions paid $20,000 for the purchase of land as a future building site. On November 10, 2011, NetSolutions purchased supplies for $1,350 and agreed to pay the supplier in the near future. On November 18, 2011, NetSolutions received cash of $7,500 for providing services to customers. A business earns money by selling goods or services to its customers. This amount is called revenue On November 30, 2011, NetSolutions paid the following expenses: wages, $2,125; rent, $800; utilities, $450; and miscellaneous, $275 On November 30, 2011, NetSolutions paid creditors on account, $950. On November 30, 2011, Chris Clark determined that the cost of supplies on hand at the end of the period was $550. On November 30, 2011, Chris Clark withdrew $2,000 from NetSolutions for personal use.