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Weygandt Kimmel Keiso 9 Edition

The document discusses the accounting equation of assets equaling liabilities plus owners' equity. It provides examples of common business transactions including investing cash into the business, purchasing assets, receiving cash from customers, paying expenses, and withdrawing cash. The instructions are to prepare a tabular summary or show the impact on the accounting equation of the sample transactions, as well as to prepare the income statement, statement of owners' equity, and balance sheet as of September 30, 2010.

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Shuvro Chakravorty
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123 views

Weygandt Kimmel Keiso 9 Edition

The document discusses the accounting equation of assets equaling liabilities plus owners' equity. It provides examples of common business transactions including investing cash into the business, purchasing assets, receiving cash from customers, paying expenses, and withdrawing cash. The instructions are to prepare a tabular summary or show the impact on the accounting equation of the sample transactions, as well as to prepare the income statement, statement of owners' equity, and balance sheet as of September 30, 2010.

Uploaded by

Shuvro Chakravorty
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Weygandt Kimmel Keiso

9th Edition)
Asset = Liabilities + Owners Equity
A = L + OE
1) Asset:
 Resources owned by a business.
 Used in carrying out activities such as
production.
 Capacity to provide future benefit.
2) Liabilities :
 Claims against asset.
 Existing debt and obligation.

3) Owners Equity:
 Owner claims against asset.
 Equals to total asset minus total liability.
Owners Equity

Investment by owner Withdrawal by owner


Revenues Expenses
Transaction:
Economic events that are recorded are 2
types:
a) internal
b) external

Dual Effect of each Transaction :


The transaction must have a dual effect on
the equation.
Some Transaction Analysis :
1. Mr. Ray Neal decides to open a computer
programming service which he names
Softbyte. On September1, 2010 he
invested $15,000 cash in the business.
2. Softbyte purchases computer equipment
for $7,000 cash.
3. Softbyte purchases computer paper and
other supplies for $1,600 from Acme
Supply Company.
4. Softbyte receives $1,200 cash from
customers for programming services it has
provided.
5. Softbyte receives a bill for $250 for the
Daily News for advertising but postpones
payment until a later date.
6. Softbyte 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.
7. Softbyte pats the following expenses in
cash for September : store rent $600,
salaries of employees $900 and utilities
$200.
8. Softbyte pays its Daily news bill in cash
$250.
9. Softbyte receives $600 in cash from
customers who had been billed for services
in transaction 6.
10. Ray Neal withdraws $1,300 in cash from
the business for his personal use.
Instructions:
a. Prepare a Tabular Summary from the above
transactions.
Or
Show the effects of the above transactions on
Accounting Equation.
b. Prepare an Income Statement , Owners Equity
Statement and Balance Sheet at September 30,
2010.

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