Transaction Analysis

Chapter 2 EOC – Transaction Analysis

Jannelle Richards has worked as a graphic designer for more than 5 years.  She decided to open her own graphic design business as of the first of last month, which is known as Sonoran Graphic Designs.

Account for the effect of the following transactions on the accounting equation for Sonoran.

  1. Initial investment by Jannelle Richards, $25,000.
  2. Purchased office supplies from OfficeMax for $1,500, on credit.
  3. Paid $4,500 on a 6-month office rental contract.
  4. Purchases $9,000 of office furniture from Ikea, on account.
  5. Paid $6,000 for a new computer and printer (Equipment).
  6. Received $9,600 in cash from sales for the first half of the month.
  7. For the first half of the month, sales on account totaled $5,100.
  8. Received $3,000 cash advance from a customer to develop a graphic design project.
  9. Paid part-time assistant $1,000 for 2-weeks wages.
  10. Paid telephone bill for the month of $350.
  11. Received utility bill from APS for $200.
  12. Collected cash from credit sales of $3,200.
  13. Recorded rental expense for first month, $750.
  14. Received $6,900 in cash from sales for the second half of the month.
  15. Paid part-time assistant $1,000 for 2-weeks wages.
  16. Paid Ikea $5,000 on account.
  17. Withdrew $12,000 for personal use.

Requirements:

  1. Use the attached T-Account Page or the Transaction Debit/Credit Page to summarize the preceding transactions as they affect the accounting equation.  Identify each transaction by number.  Correctly total each account. 
  2. In good order and form, prepare a Trial Balance.


T-Account Page – If you have the ability to scan documents, print and complete this page, then scan.

If you do not have the ability to scan, skip this page and complete the transaction Debit/Credit page.


Transaction Debit/Credit Page – If you did not complete the T-Account page, complete this page.

Account for the effect of the following transactions on the accounting equation for Sonoran.

                                                            Account     Debit      Account     Credit

                                                            Name      Amount       Name      Amount

  1. Initial investment by Jannelle Richards, $25,000.  __________ __________  __________ __________
  2. Purchased office supplies for $1,500, on credit.   __________ __________  __________ __________
  3. Paid $4,500 on a 6-month office rental contract.   __________ __________  __________ __________
  4. Purchases $9,000 of furniture, on account.         __________ __________  __________ __________
  5. Paid $6,000 for a new computer (Equipment).        __________ __________  __________ __________
  6. Received $9,600 in cash from.                      __________ __________  __________ __________
  7. Sales on account totaled $5,100.                   __________ __________  __________ __________
  8. Received $3,000 cash advance from a customer.      __________ __________  __________ __________
  9. Paid assistant $1,000 for 2-weeks wages.           __________ __________  __________ __________
  10. Paid telephone bill for the month of $350.         __________ __________  __________ __________
  11. Received utility bill from APS for $200.           __________ __________  __________ __________
  12. Collected cash from credit sales of $3,200.        __________ __________  __________ __________
  13. Recorded rental expense for first month, $750.     __________ __________  __________ __________
  14. Received $6,900 in cash from sales.                __________ __________  __________ __________
  15. Paid assistant $1,000 for 2-weeks wages.           __________ __________  __________ __________
  16. Paid vendor $5,000 on account.                     __________ __________  __________ __________
  17. Withdrew $12,000 for personal use.                 __________ __________  __________ __________


In good order and form prepare a Trial Balance for Sonoran Graphic Designs.

Text Format Example: Comprehensive Need-to-Know Review Problem 2-5

In good order and form prepare an Income Statement for Sonoran Graphic Designs.

Text Format Example: Comprehensive Need-to-Know Review Problem 2-5

In good order and form prepare a Statement of Owners Equity for Sonoran Graphic Designs.

Text Format Example: Comprehensive Need-to-Know Review Problem 3-7

In good order and form prepare a Balance Sheet for Sonoran Graphic Designs.

Text Format Example: Comprehensive Need-to-Know Review Problem 2-5