CALCULATOR HESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSIO Exercise 3-7 (Part L

Question

CALCULATOR HESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSIO Exercise 3-7 (Part Level Submission) Selected transactions for Front Room, an interilor decorator corporation, in its first month of business, are as follows. 1. 2. Purchased used car for $10,700 cash for use in business. Issued stock to investors for $16,600 in cash. 3. Purchased supplies on account for $200. 4. Billed customers $4,860 for services performed 5. Paid $290 cash for advertising start of the business 6. Received $1,570 cash from customers billed in transaction (4) 7. Paid creditor $410 cash on account. 8. Paid dividends of $350 cash to stockholders For each transaction indicate the basic type of account debited and credited (asset, liability, stockholders' equity); the specific account debite (a) (Cash, Rent Expense, Service Revenue, etc.); whether the specific account is increased or decreased; and the normal balance of the specific Account Debited Account Credited Normal Balance No. Basic Type Specific Account Effect Basic Type Specific Account Effect Increase Debit Stocknolders Equity Common Stock Increase 1. Asset 2. 3. 4. 5. Cash ecy Policy 1 8 2000-2018John Wiley& Sons.Ins, All Rights Reserved. A Division of John Wiley&Sos.; Ins

Explanation / Answer

No

Account Debited

Account Credited

Basic Type

Specific Type

Effect

Normal Balance

Basic Type

Specific Type

Effect

Normal Balance

1

Asset

Cash

Increase

Debit

Stock holders Equity

Common Stock

Increase

Credit

2

Asset

Equipment

Increase

Debit

Asset

Cash

Decrease

Debit

3

Asset

Supplies

Increase

Debit

Liabilities

Accounts Payable

Increase

Credit

4

Asset

Accounts Receivable

Increase

Debit

Stock holders Equity

Revenue

Increase

Credit

5

Stock holders Equity

Expenses

Increase

Debit

Asset

Cash

Decrease

Debit

6

Asset

Cash

Increase

Debit

Asset

Accounts Receivable

Decrease

Debit

7

Liabilities

Accounts Payable

Decrease

Credit

Asset

Cash

Decrease

Debit

8

Stock holders Equity

Common Stock

Decrease

Debit

Asset

Cash

Decrease

Debit

No

Account Debited

Account Credited

Basic Type

Specific Type

Effect

Normal Balance

Basic Type

Specific Type

Effect

Normal Balance

1

Asset

Cash

Increase

Debit

Stock holders Equity

Common Stock

Increase

Credit

2

Asset

Equipment

Increase

Debit

Asset

Cash

Decrease

Debit

3

Asset

Supplies

Increase

Debit

Liabilities

Accounts Payable

Increase

Credit

4

Asset

Accounts Receivable

Increase

Debit

Stock holders Equity

Revenue

Increase

Credit

5

Stock holders Equity

Expenses

Increase

Debit

Asset

Cash

Decrease

Debit

6

Asset

Cash

Increase

Debit

Asset

Accounts Receivable

Decrease

Debit

7

Liabilities

Accounts Payable

Decrease

Credit

Asset

Cash

Decrease

Debit

8

Stock holders Equity

Common Stock

Decrease

Debit

Asset

Cash

Decrease

Debit

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