Questions:
Question 1
Determine what accounts are affected by what amounts and indicate whether it is an increase (+), decrease (-), or there is no effect (0) in each of the following cases.
Sept. 6 Invested $35,000 cash and $2,000 of supplies into the start-up of the business
Sept. 8 Received $21,000 cash for lawn care services provided to customers
Sept. 10 Purchased machinery on account for $18,500 from Sears Corporation
Sept. 12 Paid $3,750 for supplies bought
Sept. 15 Paid $17,500 for land acquired
Sept. 17 Paid $10,000 on account for the machinery previously purchased from Sears
Sept. 19 Paid telephone bill for $1,000
Sept. 21 Paid $1,500 for supplies
Sept. 21 Paid $3,500 for additional machinery
Sept. 22 Received $23,500 for services rendered
Sept. 26 Withdrew $10,000 cash for personal use
Sept. 30 The inventory of supplies showed a balance of $3,000 on hand
Instructions:
You are required to record the effect of each transaction in the table provided below.
Question 1 (Worksheet)
Record the effect of each transaction in the following table:
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Cash
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Supplies
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Equipment
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Land
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Accounts Payable
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Capital
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Sept. 6
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Sept. 8
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Sept. 10
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Sept. 12
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Sept. 15
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Sept. 17
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Sept. 19
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Sept. 21
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Sept. 21
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Sept. 22
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Sept. 26
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Sept. 30
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Question 2
You have been recently appointed as the accountant for Gone Clear Company. Prepare an income statement based on the following transactions:
Service Revenue $190,000
Supplies Expense $80,000
Salary & Wage $60,000
Administrative Expense $30,000
Miscellaneous Expense $5,000
Question 3
Based on Question 2 above (Gone Clear Company), what would the net income or net loss be if, in addition to the listed expenses, there was an additional $25,000 for office rent?