Week 1 Assignment
Question 1
Ruddy Lewis operates a bike repair shop operating under the name R.L. Bike Repairs. The balances of his accounts on April 1 of the current year were as follows:
Cash $10,800
Supplies 1,200
Machines 6,400
Accounts Payable 6,000
Capital 12,400
The following transactions were incurred for the month of April:
- Paid wages of $700 for 1st pay period in the month
- Paid creditors on account $4,000
- Purchased a new machine on account for $3,100
- Received $7,200 cash from customers for bike repairs service
- Paid courier service expense $280
- Paid $850 cash for wages for the 2nd pay period in the month.
- Ruddy Lewis withdrew $500 cash for personal use (“drawings”)
- Paid creditors on account $1,200
- Inventory of supplies at end of the month (April 30) was $550
- Received $3,500 cash from customers for bike repairs service
You are required to record the transactions in the form provided, showing the balances on each account at the end of each transaction cycle. Transaction 1 has been completed for you.
Question 1 continued
| Assets = Liabilities + Owners Equity | ||||||||||
| Balance April 1 | + | Cash
| +
| Supplies
| Machines
| Accounts Payable | Ruddy Lewis, Capital
| |||
| Balance (April 1) $10,800 $1,200 | $6,400 | $6,000 | $12,400 | |||||||
| Transaction Numbers | ||||||||||
| 1 | -700 | 0 | 0 | 0 | -700 | |||||
| Balance | $10,100 | $1,200 | $6,400 | $6,000 | $11,700 | |||||
| 2 | ||||||||||
| Balance | $ | $ | $ | $ | $ | |||||
| 3 | ||||||||||
| Balance | $ | $ | $ | $ | $ | |||||
| 4 | ||||||||||
| Balance | $ | $ | $ | $ | $ | |||||
| 5 | ||||||||||
| Balance | $ | $ | $ | $ | $ | |||||
| 6 | ||||||||||
| Balance | $ | $ | $ | $ | $ | |||||
| 7 | ||||||||||
| Balance | $ | $ | $ | $ | $ | |||||
| 8 | ||||||||||
| Balance | $ | $ | $ | $ | $ | |||||
| 9 | ||||||||||
| Balance | $ | $ | $ | $ | $ | |||||
| 10 | ||||||||||
| Balance, April 30 | $ | $ | $ | $ | $ | |||||
Short Questions
- Kevin Foster begins business by investing $20,000 in cash, equipment valued at $60,000, and $5,000 worth of supplies. What is the equity of the company? Show all workings in an acceptable format.
- If Kevin Foster included $30,000 in notes payable (treated as part of liabilities), what is the amount of the owner’s equity account? Incorporate the information from the previous question (Question 1, above).