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Fill in the missing amounts in the balance sheet after the following transactions.

You start with \[tex]$2,500 in cash and in owner's equity.
1. You purchase testing equipment for \$[/tex]815.
2. You sell a product purchased for \[tex]$500 for \$[/tex]1,750.
3. You receive next month's utility bill for \[tex]$185.
4. You pay the rent by check for \$[/tex]300.

[tex]\[
\begin{tabular}{|c|c|c|c|c|c|c|}
\hline \multicolumn{2}{|c|}{ Assets } & & \multicolumn{4}{|c|}{ Liabilities and Owner's Equity } \\
\hline Cash & \$ & & & Accounts Payable & & \$185 \\
\hline Equipment & \$ & & Owner's Equity: Investment & \$ & \\
\hline Total Assets & \$ & Total Liabilities and Owner's Equity & \$ & \\
\hline
\end{tabular}
\][/tex]



Answer :

GinnyAnswer
Certainly! Let's go through each transaction step by step and complete the balance sheet accordingly.

Initial State:

- Cash: \[tex]$2,500 - Equipment: \$[/tex]0
- Accounts Payable: \[tex]$0 - Equity: \$[/tex]2,500

Step-by-Step Transactions:

1. Purchase testing equipment for \[tex]$815: - Decrease Cash by \$[/tex]815: \[tex]$2,500 - \$[/tex]815 = \[tex]$1,685 - Increase Equipment by \$[/tex]815: \[tex]$0 + \$[/tex]815 = \[tex]$815 2. Sell product purchased for \$[/tex]500 for \[tex]$1,750: - Increase Cash by \$[/tex]1,750: \[tex]$1,685 + \$[/tex]1,750 = \[tex]$3,435 - Increase Equity by the profit from the sale: - Profit = Selling Price - Cost = \$[/tex]1,750 - \[tex]$500 = \$[/tex]1,250
- New Equity: \[tex]$2,500 + \$[/tex]1,250 = \[tex]$3,750 3. Receive next month's utility bill for \$[/tex]185:
- Increase Accounts Payable by \[tex]$185: \$[/tex]0 + \[tex]$185 = \$[/tex]185

4. Pay the rent by check for \[tex]$300: - Decrease Cash by \$[/tex]300: \[tex]$3,435 - \$[/tex]300 = \[tex]$3,135 Calculating Totals: - Total Assets: - Cash: \$[/tex]3,135
- Equipment: \[tex]$815 - Total Assets: \$[/tex]3,135 + \[tex]$815 = \$[/tex]3,950

- Total Liabilities and Owner's Equity:
- Accounts Payable: \[tex]$185 - Equity: \$[/tex]3,750
- Total Liabilities and Owner's Equity: \[tex]$185 + \$[/tex]3,750 = \[tex]$3,935 The balance sheet would now look like this: \[ \begin{array}{|c|c|c|c|c|c|c|} \hline \multicolumn{2}{|c|}{\text{Assets}} & & \multicolumn{4}{|c|}{\text{Liabilities and Owner's Equity}} \\ \hline \text{Cash} & \$[/tex]3,135 & & & \text{Accounts Payable} & & \[tex]$185 \\ \hline \text{Equipment} & \$[/tex]815 & & \text{Owner's Equity: Investment} & & & \[tex]$3,750 \\ \hline \text{Total Assets} & \$[/tex]3,950 & \text{Total Liabilities and} & \text{Owner's Liabilities} & & & \[tex]$3,935 \\ \hline \end{array} \] So, the missing amounts in the balance sheet are: - Cash: \$[/tex]3,135
- Equipment: \[tex]$815 - Total Assets: \$[/tex]3,950
- Owner's Equity: Investment: \[tex]$3,750 - Total Liabilities and Owner's Equity: \$[/tex]3,935

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