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Selected transactions for L. Takemoto, an interior decorating firm, in its first month of business, are as follows.

Jan. 2 Invested $15,000 cash in the business in exchange for common stock.
3 Purchased used car for $8,200 cash for use in the business.
9 Purchased supplies on account for $500.
11 Billed customers $1,800 for services performed.
16 Paid $200 cash for advertising.
20 Received $780 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.
28 Declared and paid a $500 cash dividend.

For each transaction, indicate the following.

(a) The basic type of account debited and credited (Asset, Liability, Stockholders’ Equity).
(b) The specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.).
(c) Whether the specific account is increased or decreased.
(d) The normal balance of the specific account.

Respuesta :

akiran007

Answer:

The bold letters indicate the changes made and the effects of the transactions.

Where OE= Owner's Equity

AR = Account Receivable

R= revenue

E= expenses

                   Asset = Liabilities + Owner's Equity

Cash             =                                         OE

15000                 =                                 15000                

Jan. 2 Invested $15,000 cash in the business in exchange for common stock.

                                     Asset = Liabilities + Owner's Equity

Jan 9 Cash + Office Supplies = Accounts Payable +OE

            15000             + 500 = + 50 0+15000

9 Purchased supplies on account for $500.

                                           Asset = Liabilities + Owner's Equity

Jan 11  Cash+ Office Supplies+ A/R = Accounts Payable +OE  + R

           15000              + 500 + 1800 = + 50 0 +15000               +1800

11 Billed customers $1,800 for services performed.

                                           Asset = Liabilities + Owner's Equity

d.   Cash+ Office Supplies + A/R  = Accounts Payable+ OE+ Revenue -E

        15000  -200   + 500 + 1800 = + 50 0       +15000      +1800 -200

16 Paid $200 cash for advertising.

                                               Asset = Liabilities + Owner's Equity

e.     Cash+ Office Supplies+ A/R = Accounts Payable+ OE + R - E

        14,800                      + 500 + 1800 = + 50 0 +15000              +1800 -200

    +780                                     -780

      15580                       + 500 + 1020 = + 50 0                           +1800 -200

20 Received $780 cash from customers billed on January 11.

                            Asset = Liabilities + Owner's Equity

f. Cash +Office Supplies + A/R= Accounts Payable+ OE + R - E

15 580                      + 500 + 1020 = + 50 0   +15000        +1800 -200

-300                                                  -300

15280                                                   200

23 Paid creditor $300 cash on balance owed.

                                      Asset = Liabilities + Owner's Equity

g. Cash +Office Supplies +A/R = Accounts Payable+ OE + R - E

15 280                       + 500 + 300 = + 20 0   +15000        +1800 -200

-500                                                                               -500

14780                                                                 14500

28 Declared and paid a $500 cash dividends.

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