ACCOUNTING EQUATION EXERCISE

The assets, liabilities, and owner's equity of Deo Durant who operates a repair shop are listed below and completed the following transactions during the month of July, 2020.

Cash Service Income

Supplies Rent expense

Account payable Utilities expense

Durant, Capital Supplies expense

Durant, Personal

a. Organized a repair shop and deposited P50,000 cash in the bank for use by the business.

b. Purchased P2,000 of supplies on account.

c. Purchased land for future repair shop P50,000, paid P20,000, and the balance payable in three (3) equal monthly installments starting at the end of the month.

d. Paid P1,500 to creditor in transaction (b).

e. Received P3,500 cash for repair services rendered to a customer.

f. Paid P2,500 for site and equipment rental for the month.g. Rendered repair services on account to a close family friend, P4,200.

h. Paid utilities expense of P750.i. Deo Durant withdrew P5,000 cash for his personal use.

j. Paid the first installment on the purchase of land in transaction (c).

k. By the end of the month, it was determined that P600 worth of supplies were used up.

l. Received P5,000 cash for repair services.

n. Collected of the accounts receivable.

o. Deo Durant invested an additional P10,000 to his business.Instructions:

1. Indicate the effect/s of each transaction in the accounting equation using the format below.

2. Prepare an (a) income statement; (b) statement of capital; and (c) balance sheet.

Instructions: 1. Indicate the effect/s of each transaction in the accounting equation using the format below. 2. Prepare an (a) income statement; (b) statement of capital; and (c) balance sheet. ASSETS LIABILITIES & CAPITAL Trans Cash Accts Receivable Supplies Land Accts Payable Durant, Capital a 50,000 Description b 2 000 2,000 Purchased supply Bal C 50,000 20 000 Bal d Bal e Bal Bal & Sheet1 - acer