During February of this year, H. Davis established Davis Shoe Hospital. The foll

Question

During February of this year, H. Davis established Davis Shoe Hospital. The following asset, liability, and owner's equity accounts are included in the chart of accounts: Cash Accounts Payable Shop Equipment H. Davis, Capital Store Equipment Income from Services Office Equipment Advertising Expense The following transactions occurred during the month of February: Davis deposited $34,000 cash in a bank account in the name of the business. Bought shop equipment for cash, $1,725, Ck. No. 1000. Bought advertising on account from Milland Company, $625. Bought store shelving on account from Inger Hardware, $925. Bought office equipment from Shara's Office Supply, $825, paying $345 in cash and placing the balance on account, Ck. No. 1001. Paid on account to Inger Hardware, $925, Ck. No. 1002. Davis invested his personal leather working tools with a fair market value of $910 in the business. Sold services for the month of February for cash, $460.

Required: Under each T account for the account classifications (Assets, Liabilities, Capital, Drawing, Revenue, Expense) in the fundamental accounting equation, select either a plus or minus sign on the left side to indicate whether a Debit increases or decreases the classification and select either a plus or minus sign on the right side to indicate whether a Credit increases or decreases the classification.

Explanation / Answer

Cash A/c

Bank A/c

Office Equipment A/c

Advertising Expenses A/c

Milland Company A/c

Inger Hardware

Shara's Office Supply

Income from Services

H. Davis Capital A/c

There is no information regarding capital introduction in cash by H. Davis so this is not included in the accounts prepared above.

By Bank A/c -34,000 To Income from services (for the month of february) +460 By Office Equipment A/c(Shop Equipment Purchased) -1,725 By Office Equipment A/c (from Shara's Office Supply) -345 By Inger Hardware (Being payment made) -925

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