problem 1 william sons had the following transactions during february 1 received cas 4352242

 

PROBLEM

1.William & Sons had the following transactions during February:

1. Received cash from owners investing in the business.

2. Paid wages for February.

3. Purchased equipment and signed a note payable for payment in the future.

4. Performed services for customers for cash.

5. Paid utilities for February.

6. Paid an amount on the note payable(in #3) .

Required:

For each transaction, show how its financial effects would affect the different elements of the firm's accounting system. Indicate increases with a plus (+) sign and decreases with a minus (-). Where there is no effect on an item, leave the space blank.

ItemAssetsLiabilitiesEquityRevenueExpenses

2.For each event below, determine which of the categories in the firm's accounting system would be changed. If a category would increase, indicate this with a plus (+). If a category would decrease, indicate this with a minus (-). If a category would not change, leave that line blank. (Item “a” is completed as an example.)

NOTE: Do NOT make entries to the accounting system here. Instead, you are determining the EFFECT of a transaction on account balances.

AssetsLiabilitiesEquityRevenueExpense

a.Wages earned by employees but not yet paid++

b.$2,000 of inventory was purchased using a note payable to be paid later                           

c.$8,000 was borrowed from a bank

d.Cash was distributed to owners of the firm

e.Equipment was acquired for cash

f.Inventory costing $600 was sold for $800 cash

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