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1)Purchased computers for $20,000 from Data Equipment on account 2
1)Purchased computers for $20,000 from Data Equipment on account 2. Paid $3,000 cash for May rent on storage space. 3. Received $15,000 cash from customers for contracts billed in April. 4. Performed computer services for Ryan Construction Company for $2,700 cash. 5. Paid Midland Power Co. $11.000 cash for energy usage in May. 6. Stockholders invested an additional $32,000 in the business 7. Paid Data Equipment for the computers purchased in (1) above 8 Incurred advertising expense for May of $840 on account
? Increase in assets, increase in liabilities Increase in assets, increase in stockholders' equity Increase in assets, decrease in liabilities Increase in assets, decrease in stockholders' equity Increase in assets, decrease in assets Increase in liabilities, increase in stockholders' equity Increase in liabilities, decrease in liabilities Increase in liabilities, decrease in stockholders' equity Increase in liabilities, decrease in assets Increase in stockholders' equity, decrease in assets Increase in stockholders' equity, decrease in liabilities Increase in stockholders' equity, decrease in stockholders' equity Decrease in assets, decrease in liabilities Decrease in assets, decrease in stockholders' equity Decrease in liabilities, decrease in stockholders' equity
Expert Solution
1) Entry
Equipment Dr 20,000
Accounts payable Cr 20,000
Increase in assets and increase in Liabilities
2)Entry
Rent Expense Dr 3000
Cash Cr. 3000
Since Expense results in outflow of cash and decrease of net income and in turn results in decrease of stock holders equity.
Decrease in assets and decrease in stock holders equity
3) Entry
Cash Dr. 15,000
Accounts receivable Cr 15,000
Increase in assets and decrease in assets
4) Entry
Cash Dr. 2700
Service revenue. Cr 2700
Since revenue results in increase of net income and it resluts in increase of owner equity
Increase in assets and increase in stock holders equity
5) Entry
Energy expense. Dr 11,000
Cash. Cr 11,000
Decrease in assets and decrease in stock holders equity
6) Entry
Cash Dr 32,000
Common stock 32,000
Since common stock is an owner's equity
Increase in assets and increase in stock holders equity
7) Entry
Accounts payable Dr 20,000
Cash Cr 20,000
Decrease in assets and decrease in Liabilities
8) Entry
Advertising Expense Dr 840
Advertising Expense payable Cr 840
Decrease in stockholders Equity and increase in Liabilities.
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