Chapter 3. Using T accounts to record transactions involving assets, liabilities, and owner’s equity. The following transactions took place at the.

Chapter 3Chapter 3Chapter 3Chapter 3..

Using T accounts to record transactions involving assets, liabilities, and owner’s equity.

The following transactions took place at the profession counseling services business established by Clifford Marshall.

InstructionsFor each transaction, set up T accounts from this list: Cash; Office Furniture; Office Equipment; Automobile;

Accounts Payable; Clifford Marshall, Capital; and Clifford Marshall, Drawing. Analyze each transaction. Record the amounts in the T accounts affected by that transaction. Use plus and minus signs to show increases and decreases in each account.

Transactions1. Clifford Marshall invested $30,000 cash in the business. 2. Purchased office furniture for $8,000 in cash. 3. Bought a fax machine for $475; payment is due in 30 days. 4. Purchased a used car for the firm for $8,000 in cash. 5. Marshall invested an additional $5,000 cash in the business. 6. Bought a new computer for $1,500; payment is due in 60 days. 7. Paid $475 to settle the amount owed on the fax machine. 8. Marshall withdrew $2,000 in cash for personal expenses.Analyze: Which transactions affected asset accounts?

Transaction 1 Cash C. Marshall, Capital

+30,000 +30,000

Transaction 2Office Furniture Cash+8,000 +30,000 -8,000

Transaction 3Office Equipment Accounts

Payable+475 +475

Transaction 4Automobile Cash+8,000 +30,000 -8,000

-8,000

Transaction 5 Cash C. Marshall,

Capital+30,000 -8,000 +30,000+5,000 -8,000 +5,000

Transaction 6Office Equipment Accounts

Payable +475 +475+1,500 +1,500

Transaction 7 Accounts Payable Cash

+475 +30,000 -8,000

+1,500 +5,000 -8,000-475 -475

Transaction 8 C. Marshall, Drawing Cash

+30,000 -8,000 +5,000 -8,000

-475

+2,000 -2,000

AnalysisAll of the transactions involved

asset accounts.