QUESTION TWO TRANSACTION ANALYSIS 20 MARKS Lloyd Numbers, began an accounting practice, Good at Numbers, and completed these transactions during its first month:

a) Invested $25,000 cash and equipment with a fair value of $30,000 into the business.

b) Purchased office supplies for $2,550 on credit.

c) Paid $1,200 for rent for the month.

d) Completed accounting services for a client on credit, $2,500.

e) Received $2,500 from the above client for the work completed in transaction d).

f) Paid utilities expense for the month of $300.

g) Paid for the office supplies purchased in b).

h) Lloyd Numbers withdrew $1,000 from the business for personal use.

REQUIRED:

1. Use additions and subtractions to show the effects of each transaction on the elements of the equation in the table below.

2. Prove the accounting equation.

ASSETS II LIABILITIES + EQUITY Accounts Payable Transaction Accounts Office Receivable Supplies Equipment Cash II Explanation of Effect on Equity Lloyd Numbers, Capital (+ Investment, - Withdrawals, + Revenue, - Expenses) a) = b) Balance = c) Balance = d) = Balance e) Balance f) Balance = g) Balance h) Total Accounting Equation