Homework 1 [PDF]

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Accounting Principles ID: 3914isb1003 Date: October, 7, 2016 Name: Pham Khanh Huy



Chapter 1 E1-6: Selected transactions for Green Valley Lawn Care Company are listed below. 1. 2. 3. 4. 5. 6. 7. 8. 9.



Made cash investment to start business. Paid monthly rent. Purchased equipment on account. Billed customers for services performed. Withdrew cash for owner’s personal use. Received cash from customers billed in (4). Incurred advertising expense on account. Purchased additional equipment for cash. Received cash from customers when service was performed.



Answers: Transaction



Effect



Increase



Investment



Decrease



Expense



Assets



Made cash investment to start business.



Increase



Paid monthly rent.



Decrease



3



Purchased equipment on account.



Increase



4



Billed customers for services performed.



Increase



Increase



Revenue



5



Withdrew cash for owner’s personal use.



Decrease



Decrease



Drawing



1



2



6



Received cash from customers billed in (4).



Increase



Liabilities



Owner’s Equity



Description



Type of loan



Increase



Asset composition change



7



Incurred advertising expense on account.



8



Purchased additional equipment for cash.



9



Received cash from customers when service was performed.



Increase



Decrease



Asset composition change



Increase



increase



Expense



Increase



Revenue



E1-7: Falske Computer Timeshare Company entered into the following transaction during May 2017: 1. 2. 3. 4. 5. 6. 7. 8.



Purchased computers for $20,000 from Digital Equipment on account. Paid $4,000 cash for May rent on storage space. Received $17,000 cash from customers for contracts billed in April. Performed computer services for Viking Construction Company for $4,000 cash. Paid Tri-State Power Co. $11,000 cash for energy usage in May. Falske invested an additional $29,000 in the business. Paid Digital Equipment for the computers purchased in (1) above. Incurred advertising expense for May of $1,200 on account.



Answers:



Transaction



1



2



3



Description



Consequence



Purchased computers for $20,000 from Digital Equipment (c) An increase in assets and an increase on account. in liabilities Paid $4,000 cash for May rent on storage space. Received $17,000 cash from customers for contracts billed in April.



(d) A decrease in assets and a decrease in owner’s equity



(a) An increase in assets and a decrease in assets



4



5



6



7



8



Performed computer services for Viking Construction Company for $4,000 cash.



(b) An increase in assets and an increase in owner’s equity.



Paid Tri-State Power Co. $11,000 cash for energy usage in May.



(d) A decrease in assets and a decrease in owner’s equity



Falske invested an additional $29,000 in the business. Paid Digital Equipment for the computers purchased in (1) above. Incurred advertising expense for May of $1,200 on account.



(b) An increase in assets and an increase in owner’s equity.



(e) A decrease in assets and a decrease in owner’s equity.



(f) An increase in owner’s equity and a decrease in liabilities.



P1-4A Trixie Maye started her own consulting firm, Matrix Consulting, on May 1, 2017. The following transaction occurred during the month of May: 1 2 3 4 5 6 7 8 9 10 11 Answers:



Trixie invested $7,000 cash in the business Paid $900 for office rent for the month Purchased $600 of supplies on account Paid $125 to advertise in the country news Received $4,000 cash for services on account Paid $2,500 for employee salaries Paid for the supplies purchased on account on may 3 Received a cash payment of $4,000 for services performed on account on may 15 Borrowed $5,000 from the bank on a note payable Purchased equipment for $4,200 on account Paid $275 for utilities