Exercise 1

Create a table in MS Excel with each of the following accounts and indicate their effect on the accounting equation.

On February 1, 2020, Miguel Toro established a home rental business under the name Miguel's Rentals. During the month of March the following transactions were recorded:

To open the business, he deposited $60,000 of his personal funds as an investment.

Purchased equipment for $6,000 on credit.

Purchased office supplies for $1,500 in cash.

Received rental income from a property for $3,500 in cash.

Paid utilities expenses of $800.00.

Paid $1,200 for equipment purchased on credit from the second transaction.

Received income for managing the rental of a building for $4,000 in cash.

Provided a rental advisory service to a customer for $3,000 on credit.

Paid wages of $1,500 to his secretary.

Made a withdrawal of $500.00 for personal use.

Exercise 2

Create a table in Excel, analyze the following transactions and indicate which account increases and which account decreases, or if both accounts decrease or both accounts increase. Also indicate how the accounting equation is affected.

Cash is received for investment in the business of $80,000.

Rent for the month is paid for $2,200 in cash.

Office supplies are purchased for $600.00 in cash.

Office equipment is purchased on credit for $4,000.

Work is performed for a customer on credit for $2,500.

Exercise 3

Create a table in MS Excel with each of the following accounts and indicate their effect on the accounting equation.

Create a table in MS Excel with each of the following accounts and indicate their effect on the accounting equation.

To open the business, he deposited $45,000 of his personal funds as an investment.

He purchased office supplies for $1,000 on credit.

Received service income of $2,000 in cash.

Paid utilities expenses of $400.00.

Paid $300 for supplies purchased on credit.

Received service income of $4,000 in cash.

Provided a service to a customer for $3,000 on credit.

Paid wages of $1,800 to an employee.

Made a withdrawal of $200.00 for personal use.