Question

Step 1 -Analyze Business Transactions (Accounting Cycle) Assume that you are the Financial Accountant of a newly started business from your chosen in August 2020: You are requested to assume the chosen business transactions during the month of August 2020 and analyze it by shown the impact of these transactions on the accounting equation!

The question asked to assume the financial transactions ! so they are not given in the question, we have to assume them

Answer 1

Solution:

I am assuming here some of the business transactions as below:

Aug 1	Business started with Capital	$ 100,000
Aug 5	Equipment purchased with cash	$ 20,000
Aug 10	Goods purchased on account	$ 20,000
Aug 15	Goods sold on cash	$ 25,000
Aug 20	Cash Paid for Goods purchased on 10 august	$ 20,000
Aug 25	Cash paid for Rent	$ 10,000
Aug 30	Salaries paid to staff	$ 10,000

now lets see impact on accounting Equation of above transactions.

					Accounting Equation
			Assets			=	Equity			+	Liability
	Cash	+	Account receivables	+	Equipment	=	Capital	+	Retained earnings	+	Accounts payable
Aug-01	1,00,000	+		+		=	1,00,000	+		+
Aug-05	-20000	+		+	20,000	=		+		+
Aug-10		+		+		=		+	-20,000	+	20,000
Aug-15	25,000	+		+		=		+	25000	+
Aug-20	-20,000	+		+		=		+		+	-20000
Aug-25	-10,000	+		+		=		+	-10000	+
Aug-30	-10000	+		+		=		+	-10000	+
Total	65,000	+	0		20,000	=	1,00,000		-15,000		0

~~~ Dear Student, Please upvote the answer, if it helps. thankyou.