I am taking beginning Accounting. I have learning disabilities, so it is very difficult sometimes for me to keep up with the information in class.
Once I understand it then I am fine.
Can someone please help me understand how to balance this out?
Thank you
Accounting Equation
As of 12/31, he owned the following property that related to his practice
Cash$ $ 4,750
Office Equipment 6,200
X-Ray Equipment 11,680
Laboratory Equipment 7,920
He also owes the following business suppliers:
Chateau Gas Company 2,420
Aloe Medical Supply Co 3,740
From the preceeding information, comute the accounting elements and enter them in the accounting equation shown as follows.
Assets = Liabilities + Owner's Equity
______ = ___________ + ______________
2. During January, the assets increase by $ 7,290, and the liabilities increase by $ 4,210. Compute the resulting accounting equation.
3. During February, the asssets decrease by $ 2,920, and the liabilities increase by $ 2,200. Compute the resulting accounting equation.
2. For January the equation
Assets are:30550
Liabilities:6160
Owners Equity:36710
To balance the accounting equations and understand the changes in assets, liabilities, and owner's equity, here's how you can approach each question:
1. Initial Accounting Equation:
To determine the initial accounting equation, you need to list the assets, liabilities, and owner's equity separately. In this case, you are given the following information:
Assets:
- Cash: $4,750
- Office Equipment: $6,200
- X-Ray Equipment: $11,680
- Laboratory Equipment: $7,920
Liabilities:
- Chateau Gas Company: $2,420
- Aloe Medical Supply Co: $3,740
Owner's Equity:
- Not given
To calculate the owner's equity, you can use the following formula:
Owner's Equity = Assets - Liabilities
In this case:
Owner's Equity = (Cash + Office Equipment + X-Ray Equipment + Laboratory Equipment) - (Chateau Gas Company + Aloe Medical Supply Co)
Now, you can substitute the values in the accounting equation:
Assets = Liabilities + Owner's Equity
(4,750 + 6,200 + 11,680 + 7,920) = (2,420 + 3,740) + Owner's Equity
Simplifying:
30,550 = 6,160 + Owner's Equity
To balance the equation, subtract the liabilities from both sides:
Owner's Equity = 30,550 - 6,160
Owner's Equity = $24,390
So, the initial accounting equation is:
Assets = Liabilities + Owner's Equity
30,550 = 6,160 + 24,390
2. Changes in January:
In January, the assets increased by $7,290, and the liabilities increased by $4,210. To calculate the resulting accounting equation, you can start with the previous equation:
Assets = Liabilities + Owner's Equity (Initial equation)
30,550 = 6,160 + 24,390
Now, add the increase in assets and liabilities to their respective sides of the equation:
Assets = Liabilities + Owner's Equity (Resulting equation)
(30,550 + 7,290) = (6,160 + 4,210) + Owner's Equity
Simplifying:
37,840 = 10,370 + Owner's Equity
To balance the equation, subtract the liabilities from both sides:
Owner's Equity = 37,840 - 10,370
Owner's Equity = $27,470
So, the resulting accounting equation for January is:
Assets = Liabilities + Owner's Equity
37,840 = 10,370 + 27,470
3. Changes in February:
In February, the assets decreased by $2,920, and the liabilities increased by $2,200. To calculate the resulting accounting equation, you can start with the previous equation:
Assets = Liabilities + Owner's Equity (January equation)
37,840 = 10,370 + 27,470
Now, subtract the decrease in assets and add the increase in liabilities to their respective sides of the equation:
Assets = Liabilities + Owner's Equity (Resulting equation)
(37,840 - 2,920) = (10,370 + 2,200) + Owner's Equity
Simplifying:
34,920 = 12,570 + Owner's Equity
To balance the equation, subtract the liabilities from both sides:
Owner's Equity = 34,920 - 12,570
Owner's Equity = $22,350
So, the resulting accounting equation for February is:
Assets = Liabilities + Owner's Equity
34,920 = 12,570 + 22,350
By following these steps, you can balance the accounting equations and understand the changes in assets, liabilities, and owner's equity for each period.