| LG | 6-4. | |
|
b. Either
the owner has invested $5,000 in the business, or the business has
earned $5,000 of revenue and received cash or another asset. c. $6,000 of liabilities were paid, using up $6,000 of assets (probably cash). d. The business provided services for a customer that had made an advance payment, thereby increasing the owner’s equity and eliminating the obligation to the customer. e. Assets are decreased either by being used up as part of business operations (an expense) or being withdrawn by the owner (a draw). f. Given that there has to be at least one business transaction, then probably an asset was reduced while another was increased, such as using cash to buy supplies. This would keep the total assets unchanged at $8,000. g. $4,000 worth of services were consumed and not immediately paid for (example: wages owed to employees). |
||
 |
| LG | 6-5. | |
|
b.
|
Assets − $1,000 + $1,000 |
=
|
Liabilities $ |
+ | Owner’s
Equity $ |
c.
|
Assets + $1,000 |
=
|
Liabilities + $1,000 |
+ | Owner’s
Equity $ |
||
| Ext, Ex |
|
Ext, Ex |
|
||||||||||
|
d.
|
Assets + $5,000 |
=
|
Liabilities $ |
+ | Owner’s
Equity + $5000 |
e.
|
Assets − $1,200 |
=
|
Liabilities $ |
+ | Owner’s
Equity − $1,200 |
||
| Ext, Ex |
|
Ext, Ex |
|
||||||||||
Learning
Goal 6, continued
SOLUTIONS
|
Learning
Goal 6: Analyze Individual Transactions
|
S3
|
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