# The Expanded Accounting Equation – An Interactive Tutorial

This tutorial includes a quiz which requires use of a provided Microsoft Excel template.

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The Problem Statement for the Expanded Accounting Equation

Richard Campbell purchased and opened a web design company in Avondale, AZ, on November 1, 2017. On November 1, the beginning balance sheet showed Cash \$7,000, Accounts Receivable \$2,600, Supplies \$600, Office Equipment \$7,500, Accounts Payable \$5,700, and Campbell, Capital \$12,000. During November, the following transactions occurred.

 1 Collected \$1,500 cash on accounts receivable. 2 Paid \$2,750 of accounts payable. 3 Earned revenue of \$11,500, of which \$4,000 is paid in cash and the balance is due in December. 4 Purchased additional office equipment for \$4,200, paying \$500 in cash and the balance on account. 5 Received \$2,500 from AZ Bank – money borrowed on a note payable. 6 Incurred utilities expense for month on account \$450. 7 Withdrew \$1,800 cash for personal use. 8 Paid salaries \$3,300 and rent for November \$1,600, as well as advertising expense \$500.

Instructions

(a) Prepare a tabular analysis of the November transactions beginning with November 1 balances. The column headings should be as follows: Cash + Accounts Receivable + Supplies + Office Equipment = Notes Payable + Accounts Payable + Campbell, Capital –  Campbell, Drawings + Revenues – Expenses.

(b) Prepare an income statement for November, an owner’s equity statement for November, and a balance sheet at November 30.