Question No.

After several months of planning, Jasmine Worthy started a haircutting business

called Expressions. The following events occurred during its first month of
business.

a. On August 1, Worthy invested $3,000 cash and $15,000 of equipment in

Expressions.

b. On August 2, Expressions paid $600 cash for furniture for the shop.

c. On August 3, Expressions paid $500 cash to rent space in a strip mall for
August.

d. On August 4, it purchased $1,200 of equipment on credit for the shop (using a

long-term note payable).

e. On August 5, Expressions opened for business. Cash received from haircutting

services in the first week and a half of business (ended August 15) was $825.

f. On August 15, it provided $100 of haircutting services on account.

g. On August 17, it received a $100 check for services previously rendered on

account.

h. On August 17, it paid $125 cash to an assistant for hours worked during the
grand opening.

i. Cash received from services provided during the second half of August was
$930.

j. On August 31, it paid a $400 installment toward principal on the note payable
entered into on August 4.

k. On August 31, Worthy made a $900 cash withdrawal from the company for
personal use.

Required: Show the effects of each transaction using the accounting equation.
Question No. 2

Lena Gold began a professional practice on June 1. During June, Gold (the owner)
completed these transactions:

a. Owner invested $50,000 cash in the company along with equipment that had a
$10,000 market value.

b. The company paid $1,600 cash for rent of office space for the month.

c. The company purchased $12,000 of additional equipment on credit (payment

due within 30 days).

d. The company completed work for a client and immediately collected the $2,000
cash earned.

e. The company completed work for a client and sent a bill for $7,000 to be
received within 30 days.

f. The company purchased additional equipment for $8,000 cash.

g. The company paid an assistant $2,400 cash as wages for the month.

h. The company collected $5,000 cash as a partial payment for the amount owed
by the client in transaction e.

i. The company paid $12,000 cash to settle the liability created in transaction c.

j. Owner withdrew $500 cash from the company for personal use.

Required: Show the effects of each transaction using the accounting equation.

Question No. 3

Miranda Right started Right Consulting, a new business, and completed the
following transactions during its first year of operations.
 a. M. Right invests $60,000 cash and office equipment valued at $30,000 in the
company.

b. The company purchased a $300,000 building to use as an office. Right paid

$50,000 in cash and signed a note payable promising to pay the $250,000 balance
over the next ten years.

c. The company purchased office equipment for $6,000 cash.

d. The company purchased $4,000 of office supplies and $1,000 of office

equipment on credit.

e. The company paid a local newspaper $1,000 cash for printing an announcement
of the office’s opening.

f. The company completed a financial plan for a client and billed that client $4,000
for the service.

g. The company designed a financial plan for another client and immediately
collected an $8,000 cash fee.

h. M. Right withdrew $1,800 cash from the company for personal use.

i. The company received $3,000 cash as partial payment from the client described
in transaction f.

j. The company made a partial payment of $500 cash on the equipment purchased
in transaction d.

k. The company paid $2,500 cash for the office secretary’s wages for this period.

Required: Show the effects of each transaction using the accounting equation.

Question No. 4

J. D. Simpson started The Simpson Co., a new business that began operations on
May 1. The Simpson Co. completed the following transactions during its first
month of operations.
May 1 J. D. Simpson invested $60,000 cash in the company.

May 1 The company rented a furnished office and paid $3,200 cash for May’s rent.

May 3 The company purchased $1,680 of office equipment on credit.

May 5 The company paid $800 cash for this month’s cleaning services.

May 8 The company provided consulting services for a client and immediately
collected $4,600 cash.

May 12 The company provided $3,000 of consulting services for a client on credit.

May 15 The company paid $850 cash for an assistant’s salary for the first half of
this month.

May 20 The company received $3,000 cash payment for the services provided on
May 12.

May 22 The company provided $2,800 of consulting services on credit.

May 25 The company received $2,800 cash payment for the services provided on
May 22.

May 26 The company paid $1,680 cash for the office equipment purchased on May
3.

May 27 The company purchased $60 of advertising in this month’s (May) local
paper on credit; cash payment is due June 1.

May 28 The company paid $850 cash for an assistant’s salary for the second half
of this month.

May 30 The company paid $200 cash for this month’s telephone bill.

May 30 The company paid $480 cash for this month’s utilities.

May 31 J. D. Simpson withdrew $1,200 cash from the company for personal use.

Required: Show the effects of each transaction using the accounting equation.
Question No. 5

Curtis Hamilton started a new business and completed these transactions during
December.

Dec. 1 Curtis Hamilton transferred $56,000 cash from a personal savings account
to a checking account in the name of Hamilton Electric.

Dec. 2 The company rented office space and paid $800 cash for the December rent.

Dec. 3 The company purchased $14,000 of electrical equipment by paying $3,200

cash and agreeing to pay the $10,800 balance in 30 days.

Dec. 5 The company purchased office supplies by paying $900 cash.

Dec. 6 The company completed electrical work and immediately collected $1,000
cash for these services.

Dec. 8 The company purchased $3,800 of office equipment on credit.

Dec. 15 The company completed electrical work on credit in the amount of $4,000.

Dec. 18 The company purchased $500 of office supplies on credit.

Dec. 20 The company paid $3,800 cash for the office equipment purchased on
December 8.

Dec. 24 The company billed a client $600 for electrical work completed; the
balance is due in 30 days.

Dec. 28 The company received $4,000 cash for the work completed on December
15.

Dec. 29 The company paid the assistant’s salary of $1,200 cash for this month.

Dec. 30 The company paid $440 cash for this month’s utility bill.

Dec. 31 C. Hamilton withdrew $700 cash from the company for personal use.

Required: Show the effects of each transaction using the accounting equation.