Management Accounting

Running head: REPORT 1
MANAGEMENT ACCOUNTING
STUDENT DETAILS:
4/17/2019

REPORT 2
The accounting equation is the foundation of system related to the double-entry. The accounting
equation states he balance sheet of company where the total of all the assets of a company is
similar to the sum of liabilities of corporation and equity of shareholder (Koopman, Wang and
Wei, 2014). On the basis of the double-entry system, the accounting equation makes sure that the
balance sheet remains “balanced,” and all entries conducted on the side of debit must have the
corresponding entry on a side of credit (Warren and Jones, 2018). Following is the formula of
accounting equation-
Assets= Liabilities + Owner's Equity
Assets= (Liabilities + Owner’s Equity)
The balance sheet of a company keeps the foundation of an accounting equation:
 Place the total assets of corporation on a balance sheet for a period.
 All the liabilities that must be the separate listing on a balance sheet of company.
 Place whole equity of the shareholders and add the numbers to all liabilities as total.
 Total assets would be the sum total equity and liabilities.
In this way, the accounting equation makes the basis for the double-entry accounting and is a
brief illustration of the perception that expand in a difficult, expanded, and multi-item state of
the balance sheet. As per the double-entry accounting system, the balance sheet of company
is made where the total asset of a corporation are same to the complete liabilities and
stakeholder equity (Schwaiger, 2015).

REPORT 3
Fundamentally, the representation every use of capital or asset to the all sources of capital,
wherever debt capital requires to liabilities and equity capital lead to an equity of
shareholder. The accounting equation is a very helpful in evaluating whether the transactions
related to the business carried on by the corporation are being correctly states in the book and
account (Pratt, 2016). For an entity keeping proper accounts, all the separate transactions
related to business would be stated in minimum 2 accounts. It can be calculated as follows-
Assets = Liabilities+ Owner’s equity
Cash + Accounts Receivable + Office Supplies + Prepaid Insurance + Equipment + Land =
(Accounts Payable + Utilities Payable + Unearned Revenue + Notes Payable) + (Capital +
Withdrawals + Service Revenue + Salaries Expense + Rent Expense + Utilities Expense +
Advertising Expense)
54540 + 2700 + 2400 + 4000 + 10620 + 18000 = (2000 + 280 + 1440 + 28000) + (50000 +
3000 + 20200 + 3600 + 700 +280 + 800)
Journal entries
Date particulars Debit Credit
December 1 Cash
Williamson, capital
(Being owner contribution
made)
50,000
50,000
December 1 Equipment
Cash
(Purchased equipment with
cash)
10,800
10,800
December 1 Prepared insurance
Cash
(Paid insurance in advance)
4,500
4, 500
December 9 Land
Cash
(Purchased land with cash)
18,000
18,000
December 10 Office supplies
Account payable
(purchased office supplies
3,000
3,000

REPORT 4
on account)
December 19 Cash
Notes payable
(Borrowed cash on notes
payable)
28,000
28,000
December 22 Advertising expenses
Cash
(Paid cash expenses)
800
800
December 26 Account payable
Cash
(Paid cash on account)
1,000
1,000
December 28 Utilities expense
Utilities payable
(Accrued Utility Liability)
280
280
December 31 Cash
Account Receivable
Service Revenue
(To record service revenue)
17,500
2,700
20,200
December 31 Salaries expense
Rent Expense
Cash
(To record expenses)
3,600
7,00
4,300
December 31 Cash
Unearned revenue
(To record unearned
revenue)
1,440
1,440
December 31 Williamson, withdrawal
cash
(To record owner’s draw)
3,000
3,000
December 31 Supplies expenses
Office supplies
(To record used office
supplies)
600
600
December 31 Depreciation expense-
equipment
Accumulated
depreciation-equipment
(To record depreciation of
equipment)
180
180
December 31 Insurance expense
Prepaid expense
(To record expired
insurance)
500
500
December 31 Interest expense
Interest payable
(To accrue interest
75
75