In this Excel accounting practice problem, we are entering transactions related to a business startup. The transactions involve recording deposits from the owner and a loan obtained for business purposes. We are using an Excel worksheet with two tabs: “Example” as an answer key and “Practice” for recording transactions.
1. Owner’s Investment:
- On 1/1, the owner invests $65,000 from personal funds into the business checking account.
- We create a new account called “Owner Investment” to track these funds separately from regular equity.
Entering Data:
- In the “Practice” tab, insert a new line for “Owner Investment” below the equity account.
- Enter “Owner Investment” in cell A14 and set the initial investment to $0 in cell B14.
- Use the formula in cell B15:
=SUM(B13:B14)to track the investment balance.
Recording in General Ledger:
- In cell M13 (1/1), input the owner’s investment of $65,000 in the “Practice” tab.
- In cell Q5 (1/1), record the same amount in the checking account.
2. Loan Obtained:
- Simultaneously, the business takes out a loan of $50,000 to fund equipment and inventory.
- The other side of the entry goes to the “Loan Payable” account.
Entering Data:
- In cell M11 (1/1), enter $50,000 as the loan payable in the “Practice” tab.
- Update the formula in cell B12:
=SUM(B11:B12)to track the loan payable balance.
Recording in General Ledger:
- In cell Q6 (1/1), record the loan amount of $50,000 in the loan payable account.
Verification:
- Ensure the trial balance on the “Practice” tab matches the transactions.
- Adjust any formulas or entries if needed to maintain accuracy.
Tips:
- Properly format the cells for clarity and readability.
- Use formulas to calculate balances automatically and avoid manual errors.
- Regularly check and reconcile trial balances to ensure accuracy.
This practice problem helps users understand the process of recording owner investments and loans in an Excel accounting worksheet, reinforcing the importance of accurate bookkeeping for financial reporting.