The Fashion Statement Inc. distributed perfumes and cosmetics.The following acco

Question

The Fashion Statement Inc. distributed perfumes and cosmetics.The following account changes were made in the company’saccounting records during March. For each item, describe thetransaction that caused the changes. The first item has beencompleted as an example.

a.    Cash increased $18,000; Contributed Capitalincreased $18,000. The owners invested $18,000 in thecompany.

b.    Equipment increased $12,000; Cash decreased$12,000.

c.    Cash decreased $8,500; Notes Payabledecreased $8,500.

d.    Supplies inventory increased $13,500; Cashdecreased $13,500.

e.    Merchandise Inventory decreases $10,000;Cost of Goods Sold increased $10,000.

f.     Cash increased $23,500; Sales Revenueincreased $23,500.

g.    Supplies Expense increased $3,000; Suppliesinventory decreased $3,000.

Explanation / Answer

a The oweners invested$15000 in the Company b The Company purchased Equipment worth$12000 by paying Cash c The Company repaid Notes payable worth$8500 with cash d The Company made a cash purchase worth$13500 of supplies inventory e The Company sold goods costing $10000 f The company sold the above goods for$10000 for cash g The Company used up supplies worth $3000 from the supplies inventory Note The Company is following Perpetual inventorysystem

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