Question

Gary's Garage is an incorporated business run by Gary Gears. During its first month of operations, the following transactions occurred:

1. Gary starts the business by investing cash of $19,000 in exchange for $10,000 in company shares and a $9,000 loan payable to Gary .

2. Gary's Garage purchased equipment for $5,500 cash.

3. Gary's Garage purchased $400 for supplies, on account.

4. Gary's Garage invoiced a customer for $1,200 of repair services, with payment due in 30 days.

5. Gary's Garage paid $1800 to rent a piece of equipment for three months: the current month and the next two.

6. Gary paid $300 cash for electricity and gas bills for the current month.

7. Gary signed an agreement with a local car rental company to provide oil changes for the rental fleet at a price of $30 per car.

8. Gary hired an assistant and paid him $1500 in wages for the month.

9. Gary's Garage paid the bill for supplies (from #3).

10. Received a $500 deposit from a customer to complete an engine rebuild. Gary plans to complete the job in the following month.

Required:

Using the table provided here, show how each transaction affects the accounting equation. You need not indicate the specific accounts affected. Only enter ONE AMOUNT that is the total net amount by which each component of the equation increases or decreases. DO NOT USE COMMAS, DOLLAR SIGNS, OR ANY OTHER SPECIAL CHARACTERS WHEN ENTERING MONETARY AMOUNTS AND ONLY ENTER AMOUNTS IN DOLLARS (e.g. enter 100 not 100.00).

ENTER INCREASES AS POSITIVE NUMBERS AND ENTER DECREASES AS NEGATIVE NUMBERS (e.g. if an equation component decreases by $100, enter "-100" (without the quotation marks). When a component of the accounting equation is not affected at all, type in "N/A" (used this exact wording, without the quotations). If a component of the equation increases and decreases by the same amount, type in "Net Zero Change" (use this exact wording).

Item	ASSETS	=	LIABILITIES	+	SHAREHOLDERS' EQUITY
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Answer 1

Item	Asset	=	Liabilities	+	Shareholder Equity	Remark for Understanding
1	$19,000.00		$9,000.00		$10,000.00
2	Net Zero Change					Euipment +, Cash -
3	$400.00		$400.00
4	$1,200.00				$1,200.00
5	-$600.00				-$600.00	Prepaid Rent : 1200, Rent Expense : 600, Cash -1800,
6	-$300.00				-$300.00
7	N/A		N/A		N/A
8	-$1,500.00				-$1,500.00
9	-$400.00		-$400.00
10	$500.00		$500.00