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Margaret Moore opened a law office on July 1, 2020. On July 31, the balance sheet showed Cash $5,900, Accounts Receivable $2,000, Supplies $500, Equipment

Margaret Moore opened a law office on July 1, 2020. On July 31, the balance sheet showed Cash $5,900, Accounts Receivable $2,000, Supplies $500, Equipment $6,100, Accounts Payable $4,300, and Owners Capital $10,200. During August, the following transactions occurred.

1. Collected $1,700 of accounts receivable.
2. Paid $2,700 cash on accounts payable.
3. Recognized revenue of $7,600, of which $3,200 is collected in cash and the balance is due in September.
4. Purchased additional equipment for $2,200, paying $400 in cash and the balance on account.
5. Paid salaries $2,500, rent for August $1,000, and advertising expenses $400.
6. Withdrew $700 in cash for personal use.
7. Received $1,200 from Standard Federal Bankmoney borrowed on a note payable.
8. Incurred utility expenses for month on account $350.

Assets

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Liabilities

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Owners Equity

Cash

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Accounts Receivable

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Supplies

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Equipment

=

Notes Payable

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Accounts Payable

+

Owners Capital

Owners Drawings

+

Revenues

Expenses

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Foundations of Finance The Logic and Practice of Financial Management

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