Assuming the role of an accountant, your new client Suzie Maye needs help in setting up basic accounting practices for her business. You begin by showing her how to set up a transaction analysis based on the accounting equation of Assets = Liabilities + Owner’s Assets. You show Suzie how to enter the various assets, liabilities and owner’s assets into the transaction analysis template demonstrating the balance based on the equation. This will help Suzie understand that through this process every financial transaction that occurs in her business must be reconciled on each side of the equation.
Please record the following transactions using transaction analysis. Please use this template to complete this assignment.
1-May
Owner, Suzie Maye, invested $7,000 in her business, Matrix Consulting.
2-May
Company paid monthly rent, $900.
3-May
Company bought supplies on account, $600.
5-May
Company paid monthly advertising, $125.
9-May
Company performed services, $4,000.
12-May
Owner, Suzie Maye, withdrew $1,000 for personal use.
15-May
Company performed services on account for $5,400.
17-May
Company paid monthly salaries, $2,500.
20-May
Company made a payment on account, $600.
23-May
Company received $4,000 from a customer on account.
26-May
Company borrowed $5,000 from local bank.
29-May
Company bought equipment on account for $4,200.
30-May
Company paid monthly util
Expert Solution Preview
Introduction:
As a medical professor, my expertise is not in accounting. However, I can provide some guidance on how to approach this assignment based on my understanding of basic accounting principles.
Answer:
The assignment requires the use of the provided transaction analysis template to record various transactions that occur in Suzie Maye’s business. The template is based on the accounting equation, which states that Assets = Liabilities + Owner’s Equity. This equation must always balance, meaning that the total value of assets must equal the total value of liabilities and owner’s equity.
To complete the assignment, follow these steps:
1. Enter the date of each transaction in the “Date” column of the template.
2. Identify the account(s) affected by each transaction and enter the amount(s) in the appropriate columns (“Assets”, “Liabilities”, or “Owner’s Equity”).
3. For transactions involving multiple accounts, enter the amounts in the appropriate columns under each account.
4. Calculate the total value of assets, liabilities, and owner’s equity for each transaction and enter these values in the “Total Assets”, “Total Liabilities”, and “Total Owner’s Equity” columns.
5. Verify that the accounting equation balances for each transaction by verifying that the total value of assets equals the total value of liabilities and owner’s equity.
Repeat the above steps for each transaction listed in the assignment. Once all transactions have been recorded and analyzed, the final balance should equal zero for all three categories (Assets, Liabilities, and Owner’s Equity), indicating that the accounting equation has been successfully balanced.
