Page 32 - Account for Ag - 2019

2-8 Accounting for Agriculture CH 2]

EXERCISES

1. Using the accounting equation, show the following transactions:
(a) Investment of cash, $45,000.
(b) Purchase merchandise from Dairyman's Co-op on account $12,000.
(c) Payment of $6,000 on account to Dairyman's Co-op.
(d) Sale for cash of merchandise costing $3,000 for $4,500.

2. U.S. Grant's proprietorship on May 1 is shown by the first equation given below. Each line designated by a
letter indicates the effect on the equation of a particular transaction. Describe each of the transactions.

Cash + Feed + Equipment = Liabilities + Equity
$3,000 + $60,000 + $15,000 = $5,000 + $73,000
a) - 500 + $500
$2,500 + $60,500 + $15,000 = $5,000 + $73,000
b) + 300 - 300
$2,800 + $60,500 + $14,700 = $5,000 + $73,000
c) + + 7,000 +$7,000
$2,800 + $67,500 + $14,700 = $12,000 + $73,000
d) +2,500 + - 2,000 + + 500
$5,300 + $65,500 + $14,700 = $12,000 + $73,500
e) - 100 + - 100
$5,200 + $65,500 + $14,700 = $12,000 + $73,400
f) -2,000 -2,000
$3,200 + $65,500 + $14,700 = $10,000 + $73,400

3. Summary financial data of Jethro Haig's Poultry Ranch on July 1 are shown by the first equation given be-
low. Each line designated by a letter indicates the effect on the equation of a particular transaction. De-
scribe each of the transactions.

Cash + Receivable + Bldg. + Land + Equip = Liab + Equity
$ 4,000 + $18,000 + $20,000 + $16,500 + $12,000 = $10,500 + $60,000
a) + 15,000 - 15,000
$19,000 + $3,000 + $20000 + $16,500 + $12,000 = $10,500 + $60,000
b) + 4,000 - $4,000
$23,000 + $3,000 + $20,000 + $16,500 + $8,000 = $10,500 + $60.000
c) - 5,500 - 5,500
$17,500 + $3,000 + $20,000 + $16,500 + $8,000 = $5,000 + $60,000
d) +13,000 -10,000 -11,000 - 8,000
$30,500 + $ 3,000 + $10,000 + $ 5,500 + $8,000 = $5,000 + $52,000
e) +18,000 +18,000
$30,500 + $21,000 + $10,000 + $5,500 + $8,000 = $5,000 + $70,000
f) -16,000 -16,500
$14,500 + $21,000 + $10,000 + $5,500 + $8,000 = $5,000 + $54,000

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