solve 2-9

2-10

Recording Transactions Liabilities Assets 30,000 Shareholders' Equity Accounting equation 0 50.000 Cash Share Capital (1) 50,000 The /edger accounts 50,000 Transaction 2 Analysis. The business paid $40,000 cash for land. The purchase decreased cash; therefore, credit Cash. The purchase increased the asset land; to record this increase, debit Land. Journal entry 40,000 Land Cash Paid cash for land. 40.000 HO Liabilities Shareholders' Equity DOO Assets +40,000 - 40,000 Accounting equation 0 0 Cash Land The ledger accounts (1) 50,000 (2) 40,000 (2) 40,000/ Transaction 3 Analysis. The business purchased supplies for $3,700 on account payable. The purchase increased Supplies, an asset, and Accounts Payable, a liability Journal entry 3,700 Supplies Accounts Payable Purchased office supplies on account. 3,700 Assets Liabilities Shareholders' Equity Accounting equation +3.700 = +3,700 + 0 Supplies Accounts Payable 1 163) The ledger accounts (3) 3,700 3,700 Transaction 4 Analysis. The business performed services for clients and received cash of $7,000. The transaction increased cash and service revenue. To record the rev- enue, credit Service Revenue. Remember that all revenue accounts eventually increase total shareholders' equity. always posted as debits how ShineBrite Car Wash's share issuance EXHIBIT 2-2 Journal Entry and Posting to the Accounts Act Credit Debit 50,000 50,000 3 PANEL A-Journal Entry: Accounts and Explanation Cash Share Capital Issued ordinary shares. TI Share Capital T PANEL B-Posting to the Accounts: Cash 50,000 50,000 The Flow of Accounting Data Exhibit 2-10 summarizes the flow of accounting data from the business transaction to the ledger EXHIBIT 2-10 Flow of Accounting Data Transaction Occurs Transaction Analyzed Transaction Entered in the Journal Amounts Posted to the Ledger Accounts BANE Euchan 2 22 Let's continue the example of Shine Brite Car Wash, Inc., and account for the same 11 transactions we illustrated earlier. Here we use the journal and the accounts. Fach journal entry posted to the accounts is keyed by date or by transaction number. This linking allows you to locate any information you may need. Transaction 1 Analysis. ShineBrite Car Wash, Inc., received $50,000 cash rom the shareholders and in turn issued ordinary shares to them. The journal ents accounting equation, and ledger accounts follow. Journal entry Cash Share Capital Issued ordinary shares. 50,000 50,000 Recording Transactions Liabilities Assets 30,000 Shareholders' Equity Accounting equation 0 50.000 Cash Share Capital (1) 50,000 The /edger accounts 50,000 Transaction 2 Analysis. The business paid $40,000 cash for land. The purchase decreased cash; therefore, credit Cash. The purchase increased the asset land; to record this increase, debit Land. Journal entry 40,000 Land Cash Paid cash for land. 40.000 HO Liabilities Shareholders' Equity DOO Assets +40,000 - 40,000 Accounting equation 0 0 Cash Land The ledger accounts (1) 50,000 (2) 40,000 (2) 40,000/ Transaction 3 Analysis. The business purchased supplies for $3,700 on account payable. The purchase increased Supplies, an asset, and Accounts Payable, a liability Journal entry 3,700 Supplies Accounts Payable Purchased office supplies on account. 3,700 Assets Liabilities Shareholders' Equity Accounting equation +3.700 = +3,700 + 0 Supplies Accounts Payable 1 163) The ledger accounts (3) 3,700 3,700 Transaction 4 Analysis. The business performed services for clients and received cash of $7,000. The transaction increased cash and service revenue. To record the rev- enue, credit Service Revenue. Remember that all revenue accounts eventually increase total shareholders' equity. always posted as debits how ShineBrite Car Wash's share issuance EXHIBIT 2-2 Journal Entry and Posting to the Accounts Act Credit Debit 50,000 50,000 3 PANEL A-Journal Entry: Accounts and Explanation Cash Share Capital Issued ordinary shares. TI Share Capital T PANEL B-Posting to the Accounts: Cash 50,000 50,000 The Flow of Accounting Data Exhibit 2-10 summarizes the flow of accounting data from the business transaction to the ledger EXHIBIT 2-10 Flow of Accounting Data Transaction Occurs Transaction Analyzed Transaction Entered in the Journal Amounts Posted to the Ledger Accounts BANE Euchan 2 22 Let's continue the example of Shine Brite Car Wash, Inc., and account for the same 11 transactions we illustrated earlier. Here we use the journal and the accounts. Fach journal entry posted to the accounts is keyed by date or by transaction number. This linking allows you to locate any information you may need. Transaction 1 Analysis. ShineBrite Car Wash, Inc., received $50,000 cash rom the shareholders and in turn issued ordinary shares to them. The journal ents accounting equation, and ledger accounts follow. Journal entry Cash Share Capital Issued ordinary shares. 50,000 50,000