Jim Tree has $3,300 in cash and $3,300 in owners equity. The following transactions take place.
You withdraw $500 for yourself,
You sell a workbench which originally cost you $800, for $950 cash.
You pay $60 in cash for truck maintenance.
Next month's utility bills total $225.
To calculate the remaining cash and owners equity after the transactions, we will go through each transaction one by one:
1. You withdraw $500 for yourself.
To get the new cash amount, subtract $500 from $3,300:
$3,300 - $500 = $2,800
The new cash amount is $2,800.
2. You sell a workbench which originally cost you $800, for $950 cash.
To account for this transaction, we need to subtract the original cost of the workbench from the cash received:
$2,800 + $950 - $800 = $2,950
The new cash amount is $2,950.
3. You pay $60 in cash for truck maintenance.
To calculate the new cash amount, subtract the maintenance expense from the previous cash balance:
$2,950 - $60 = $2,890
The new cash amount is $2,890.
4. Next month's utility bills total $225.
To account for utility expenses, subtract $225 from the current cash balance:
$2,890 - $225 = $2,665
The final cash amount is $2,665.
Now let's calculate the new owners equity by subtracting the expenses and withdrawals from the initial owners equity of $3,300:
$3,300 - $500 (withdrawal) - $800 (workbench cost) - $60 (maintenance) - $225 (utilities) = $1,715
The new owners equity is $1,715.
Therefore, the final cash amount is $2,665, and the new owners equity is $1,715.