Queens Delivery Service Owned By Lisa Dewar

Queens Delivery Service Is Owned And Operated By Lisa Dewar The Follo

Queens Delivery Service is owned and operated by Lisa Dewar. The following selected transaction were completed by Queens Delivery service during June: 1. Received cash from owner as additional investment $18,000. 2. Paid creditors on account, $1,800. 3. Billed customers for delivery services on account, $12,500. 4. Received cash from customers on account, $6,900. 5. Paid cash to owner for personal use. $4,000. Indicate the effect of each transaction on the accounting equation elements (Assets, Liabilities, Owner's Equity, Drawing, Revenue, and Expense). Also, indicate the specific item within the accounting equation element that is affected. To illustrate, the answer to (1) to shown below (1) Asset (Cash) increases by $18,000; Owner's Equity (Lisa Dewar, Capital) increases by $18,000.

Paper For Above instruction

In this paper, we analyze the impact of various transactions on the accounting equation elements of Queens Delivery Service, owned and operated by Lisa Dewar. We focus on how each specific transaction affects assets, liabilities, owner’s equity, drawings, revenue, and expenses.

Transaction 1: Received cash from owner as additional investment ($18,000)

This transaction involves the owner injecting cash into the business, leading to an increase in the company's assets and owner’s equity. The cash (asset) increases by $18,000, and simultaneously, owner’s equity (specifically, Lisa Dewar’s capital account) increases by the same amount. Therefore, the accounting equation reflects an increase in both assets and owner’s equity.

Transaction 2: Paid creditors on account ($1,800)

The business settles its liabilities by paying creditors, which decreases both assets and liabilities. Specifically, cash (asset) decreases by $1,800, and liabilities (accounts payable) decrease by the same amount. Since there is no immediate effect on owner’s equity, revenue, or expenses, the accounting equation reflects a reduction in assets and liabilities.

Transaction 3: Billed customers for delivery services on account ($12,500)

Billing customers creates a receivable, increasing assets (accounts receivable) by $12,500. At the same time, this transaction generates revenue, which increases owner’s equity. As revenue increases, owner’s equity (specifically, retained earnings or capital account) increases by $12,500. This results in an increase in total assets and owner’s equity, with no immediate effect on liabilities or expenses.

Transaction 4: Received cash from customers on account ($6,900)

Collecting cash from customers reduces accounts receivable (asset) by $6,900 and increases cash (asset) by the same amount. Since this transaction converts receivables into cash, total assets remain unchanged. However, the collection of receivables does not affect owner’s equity directly but improves the company's liquidity position.

Transaction 5: Paid cash to owner for personal use ($4,000)

This transaction, representing owner’s drawings, decreases both assets and owner’s equity. Cash (asset) decreases by $4,000, and owner’s equity (Lisa Dewar’s capital account) decreases by the same amount, reflecting a withdrawal of funds for personal use. The overall effect is a reduction in the owner's equity and assets.

Conclusion

Each transaction impacts the accounting equation in specific ways. Investments and revenue increase owner’s equity, while expenses, drawings, and payment of liabilities decrease it. The assets fluctuate based on cash flows and receivables, and liabilities decrease when paid. Understanding these effects ensures accurate financial recordkeeping and reporting for Queens Delivery Service.

References

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