Chapter 3
The Equation Analysis Sheet
1
Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
This tutorial guides you through the basic steps of creating an
equation analysis sheet. It also illustrates how business transactions
affect financial position.
For more detailed instructions, refer to Section 3.2 of the Accounting 1
textbook.
2
Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Write down the fundamental accounting equation and list the items in
the assets, liabilities, and owner’s equity sections.
3
Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Record the initial balances from a balance sheet.
4
Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Record the initial balances from a balance sheet.
5
Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Record the initial balances from a balance sheet.
6
Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Record the initial balances from a balance sheet.
7
Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Record the initial balances from a balance sheet.
8
Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Begin recording the transactions.
9
Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 1: Metropolitan Movers pays $1200 cash to reduce the
Bank Loan.
10 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 1: Metropolitan Movers pays $1200 cash to reduce the
Bank Loan.
Record changes to the appropriate accounts.
11 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 1: Metropolitan Movers pays $1200 cash to reduce the
Bank Loan.
Record changes to the appropriate accounts.
12 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 1: Metropolitan Movers pays $1200 cash to reduce the
Bank Loan.
Record changes to the appropriate accounts.
13 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 1: Metropolitan Movers pays $1200 cash to reduce the
Bank Loan.
Record the new balances.
Make sure the equation still balances.
14 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500,
pays $1100 in partial payment of the debt.
15 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500,
pays $1100 in partial payment of the debt.
Record changes to the appropriate items.
16 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500,
pays $1100 in partial payment of the debt.
Record changes to the appropriate items.
17 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500,
pays $1100 in partial payment of the debt.
Record changes to the appropriate items.
18 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500,
pays $1100 in partial payment of the debt.
Record the new balances.
Make sure the equation still balances.
19 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 3: Equipment costing $1950 is purchased for cash.
20 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 3: Equipment costing $1950 is purchased for cash.
Record changes to the appropriate items.
21 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 3: Equipment costing $1950 is purchased for cash.
Record changes to the appropriate items.
22 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 3: Equipment costing $1950 is purchased for cash.
Record changes to the appropriate items.
23 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 3: Equipment costing $1950 is purchased for cash.
Record the new balances.
Make sure the equation still balances.
24 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 4: A pick-up truck is purchased at a cost of $18 000.
Metropolitan Movers pays $10 000 cash and arranges a loan from
its bank to cover the balance of the purchase price.
25 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 4: A pick-up truck is purchased at a cost of $18 000.
Metropolitan Movers pays $10 000 cash and arranges a loan from
its bank to cover the balance of the purchase price.
26 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 4: A pick-up truck is purchased at a cost of $18 000.
Metropolitan Movers pays $10 000 cash and arranges a loan from
its bank to cover the balance of the purchase price.
27 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 4: A pick-up truck is purchased at a cost of $18 000.
Metropolitan Movers pays $10 000 cash and arranges a loan from
its bank to cover the balance of the purchase price.
28 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 4: A pick-up truck is purchased at a cost of $18 000.
Metropolitan Movers pays $10 000 cash and arranges a loan from
its bank to cover the balance of the purchase price.
29 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 5: Metropolitan Movers completes a storage service for
B. Cava at a price of $1500. A bill is sent to Cava to indicate the
additional amount that is owed.
30 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 5: Metropolitan Movers completes a storage service for
B. Cava at a price of $1500. A bill is sent to Cava to indicate the
additional amount that is owed.
31 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 5: Metropolitan Movers completes a storage service for
B. Cava at a price of $1500. A bill is sent to Cava to indicate the
additional amount that is owed.
32 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 5: Metropolitan Movers completes a storage service for
B. Cava at a price of $1500. A bill is sent to Cava to indicate the
additional amount that is owed.
33 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 6: J. Hofner, the owner, withdraws $500 for personal
use.
34 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 6: J. Hofner, the owner, withdraws $500 for personal
use.
35 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 6: J. Hofner, the owner, withdraws $500 for personal
use.
36 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 6: J. Hofner, the owner, withdraws $500 for personal
use.
37 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 7: One of the trucks requires an engine adjustment
costing $375. The repair is paid for in cash when the truck is picked
up.
38 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 7: One of the trucks requires an engine adjustment
costing $375. The repair is paid for in cash when the truck is picked
up.
39 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 7: One of the trucks requires an engine adjustment
costing $375. The repair is paid for in cash when the truck is picked
up.
40 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Transaction 7: One of the trucks requires an engine adjustment
costing $375. The repair is paid for in cash when the truck is picked
up.
41 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Final balances from the equation analysis sheet can be used to create
an updated balance sheet.
42 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Final balances from the equation analysis sheet can be used to create
an updated balance sheet.
43 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition
The Equation Analysis Sheet
Final balances from the equation analysis sheet can be used to create
an updated balance sheet.
44 Chapter 3 – The Equation Analysis Sheet l DRAFT | Accounting 1, 7th Edition