ACC101 Assignment 04: Accounting Equation and T-Accounts

This document presents the solutions to an introductory accounting assignment (Assignment 04). Part A focuses on recording transactions within the basic accounting equation, illustrating how assets, liabilities, and owner's equity are affected by various business activities like cash investments, purchases, and payments. Part C delves into the use of T-accounts to record transactions for Campus Cycle Shop, detailing transactions such as owner investments, equipment purchases, service revenue, and expense recording. The solutions include the correct placement of debits and credits, and the calculation of ending balances for each account. This assignment provides a practical application of fundamental accounting principles and demonstrates how to track financial transactions effectively.

ASSIGNMENT 04
A01 Introduction to Accounting
Directions: Be sure to save an electronic copy of your answer before submitting it for grading. Unless
otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and
grammar. Sources must be cited in APA format. Your response should be four (4) double-spaced pages;
refer to the "Assignment Format" page located on the Course Home page for specific format
requirements.
Part A (30 points)
Record the following transactions in the basic accounting equation:
a. Brian invests $10,000 cash to begin an accounting service.
b. The company buys office furniture for cash, $600.
c. The company buys additional office furniture on account, $300.
d. The company makes a payment on the office furniture, $200.
Brian's Accounting Service
ASSETS = LIABILITIES + OWNER'S EQUITY
Cash + Office Furniture = Accounts Payable + Brian's Capital
a.
b.
c.
d.
Solution-
Assets = Liabilities + Owner's Equity
Cash + Office Furniture Accounts payable Brian's Capital
a. +$10,000 + = + +$10,000
b. ($600) + +$600 = +
c. + +$300 = +$300 +
d. ($200) + = ($200) +
Total +$9,200 +$900 +$100 +$10,000

Part B (40 points)
The following is a list of accounts and their balances for Benson Company for the month ended June 30,
20xx. Prepare a trial balance in good form.
Cash $1,370 Benson, Withdrawals $ 500
Accounts Payable 770 Accounts Receivable 1,600
Office Equipment 900 Service Fees 2,730
Benson, Capital 1,500 Salaries Expense 630
Solution-
Benson Company
Trial Balance
June 30, 20xx
Debit Credit
Cash $1,370
Accounts Payable $770
Office equipment $900
Benson, Capital $1,500
Benson, Withdrawals $500
Accounts receivable $1,600
Service Fees $2,730
Salaries expense $630
Total $5,000 $5,000
Part C (30 points)
The following transactions occurred during June for Campus Cycle Shop. Record the transactions below
in the T accounts. Place the letter of the transaction next to the entry. Foot and calculate the ending
balances of the T accounts where appropriate.
a. Tyler invested $6,500 in the bike service from his personal savings account.
b. Bought office equipment for cash, $900.
c. Performed bike service for a customer on account, $1,000.
d. Company cell phone bill received, but not paid, $80.
e. Collected $500 from customer in transaction c.
f. Tyler withdrew $300 for personal use.

Solution-
Cash 111
a Capital $6,500 b Office equipment $900
e Accounts receivable $500 f Tyler's withdrawal $300
Balance c/d $5,800
$7,000 $7,000
Tyler's Capital 311
a Cash $6,500
Office Equipment 112
b Cash $900
Bike Fees 411
c Accounts Receivable $1,000

Accounts Receivables 112
c Service Revenue $1,000 e Cash $500.00
Balance c/d $500.00
$1,000 $1,000
Telephone Expense 512
d Phone Payable $80
Accounts Payable 211
d Phone Expense $80
Tyler's Withdrawals 312
f Cash $300