Gulf Waterworks Company provides plumbing services.The company is a sole proprietorship.Transactions during the first year of operations are given below.
a)The owner,Jason Robinson,contributed $6,000 cash in exchange for capital.
b)Paid $5,000 cash for equipment to be used for plumbing repairs.
c)Borrowed $26,000 from a local bank and deposited the money in the checking account.
d)Paid $600 rent for the year.
e)Purchased $1,800 of office supplies on account.
f)Completed a plumbing repair project for a local lawyer and received $3,200 cash.
Calculate the amount of total owner's equity at the end of the first year after recording the transactions.Assume office supplies of $1,800 are left at the end of the year.

Question

Gulf Waterworks Company provides plumbing services.The company is a sole proprietorship.Transactions during the first year of operations are given below. 
a)The owner,Jason Robinson,contributed $6,000 cash in exchange for capital.
b)Paid $5,000 cash for equipment to be used for plumbing repairs.
c)Borrowed $26,000 from a local bank and deposited the money in the checking account.
d)Paid $600 rent for the year.
e)Purchased $1,800 of office supplies on account.
f)Completed a plumbing repair project for a local lawyer and received $3,200 cash.
Calculate the amount of total owner's equity at the end of the first year after recording the transactions.Assume office supplies of $1,800 are left at the end of the year.

Quizplus · Accepted Answer

A) 11ea8873_d434_ad75_bb89_216a0f19af0c_TB5026_00 Expenses
= $6,000 (contribution) + $3,200 (revenue) - $600 (rent expense) = $8,600

Gulf Waterworks Company Provides Plumbing Services