 Excel accounting practice problem. Record deposits from owner and from loan. Get ready because we're about to excel. Here we are in our worksheet. In prior presentations we put together this worksheet from a blank sheet. Now continuing to enter data into it. If you have access to this worksheet you're going to have two tabs down below. Example tab and the practice tab. Example tab in essence being an answer key. Let's take a look at it now. We're going to be entering transactions which are common to a business that is starting out that being the increasing of cash due to possibly two things that are happening. One, the owner taking money from the personal account and putting it into the business account. And two, possibly taking a loan out and putting that into the checking account so that we have the cash when the company is starting up to invest in things such as machinery and equipment such as inventory. So we're going to go back to the second tab over here and the practice tab and we're going to imagine the owner putting money from their personal investments into the business to invest in the business. So we're going to start off and we're going to say that happens on one one. We're going to say the checking account is going to be an increase. Now the other side is not going to go to an income account. That's important to note as well especially as you go forward with the business because usually when you have an increase to the checking account the other side would then go to revenue because we're expecting it to come from a customer in some way shape or form either it goes through accounts receivable but ultimately ends up cash from a customer or directly from the sales to the customer at the point in time we do the work or provide the goods and services increasing the revenue at that point. But there's two common exceptions to that rule one being the owner putting money into the business often happening at the startup of the business or when the business is expanding and two when the you're getting a loan for the business often in the same situations. So we got to be careful of that when we think about increases to the checking account where they're coming from and so we're going to say the other side could go to equity directly but we might want to break it out into another account note when money is leaving the company going to the owner when the owner draws money out we often make another account called draws instead of putting it directly to equity. We could do the same thing for investments which sometimes is not necessary because there's not as many investments as there are draws draws would be a more common thing we would expect to happen as the business grows and goes forward. We could just put them into equity but when we just put them into equity then we got to do a little bit more work at the end of the year when we're trying to reconcile the prior yearbooks to the current yearbooks. So sometimes we might want to break it out I'm going to break it out here as well with the owner investments so I'm going to make another account called owner investments I'm going to add a line below the equity to do that we're going to select the line below the equity I'm going to right click on it and insert insert and then I'm going to shift those cells down shift them down and then okay and so now it looks kind of like the cell above it but we're missing some of the formatting so I'm going to highlight the cell above it because I want that same formatting down on the one below and then go to the home page clipboard and paint brush it and then we're just going to click on that one below it and paint brush it so we got that border and everything the fancy borders too and then we're going to add the own I'm going to call this owner investment so that's going to be the investment meaning the owner putting money into the company instead of draws which we'll see later the owner taking money out that's going to be zero to start with I'm going to copy the formula down which or I'll just type it and again equals the sum of these two cells and then you want to double check your totals down below does it pick up that last cell it does not so I want to make sure that we're picking up that last cell when we total it up and then I'm going to drag it across with the autofill dragging it across this way so my totals are totaling up the entire column the totals got the total column in it the total columns totaled by the total formula with the sum so 65000 debit and the credit the other side going now to the account that we have now set up the owner investment owner investment an equity type of account we're going to then go to the home tab alignment and indent and let's go ahead and post this out so we got our checking account up top first off we're going to be in cell m4 where we will say equals pointing to that 65000 taking us from the beginning balance now at the 25000 up by the 65000 to notice this ending cell we kind of I didn't finish the last the last job that we did last time because these should be summing up so the sum is incorrect because I cut and paste so I'll try to do this by deleting these I'm going to delete this whole thing and I'm going to say this needs to be updated equals the sum of these two cells now I want to copy it down without messing up the formatting down below in terms of the colors so I'm going to right click and copy and then I'm going to paste it in a special way pasting right click just a special paste with the functions only the formulas only I should say because that's the right thing to say it's the proper thing to say I said it wrong last time I want to say it the right way so then we have the owner investment is going to be down here scrolling down to the owner investment it's in cell m13 equals picking up that 65000 so now we're going from zero up by 65000 to 65000 we're going to record this in our general ledger now the cash will be easy the owner investment not so easy because I don't have that thing in my owner investment and we'll have to add another account for that so we'll run into that problem but let's first post the checking account up top that's going to be at 11