Three former college classmates have decided to pool a variety of work experienc
ID: 2486694 • Letter: T
Question
Three former college classmates have decided to pool a variety of work experiences by opening a store near campus to sell wireless equipment to students. The business has been incorporated as University Wireless. Several transactions occurred in March. For each transaction, indicate the accounts that are affected, whether they increase or decrease, and the amount of the increase or decrease.
Transaction 1 On March 1, each of three former classmates invested $12,000 in cash in exchange for 1,000 shares of stock each Account: Dollar amount: Dollar amount: Dollar amount: Dollar amount: Dollar amount: Account: Account: Account: Account:Explanation / Answer
Transaction 1:
DR. Cash 12000
CR. Common Stock 12000
Transaction 2:
DR. Inventory 40000
CR. Accounts Payable 28000
CR. Cash 12000
Transaction 3:
DR. Rent expense 550
DR. Prepaid Rent 1100
CR. Cash 1650
Transaction 4:
DR. Advertising expense 11000
CR. Accounts Payable 4000
CR. Cash 7000
Transaction 5:
DR. Accounts Receivable 120000
DR. Cash 80000
CR. Sales 200000
Transaction 6:
DR. Wages and Salaries expense 10600
CR. Cash 5200
CR. Outstanding Wages and salaries payable 5400
Transaction 7:
DR. Miscellaneous expense 1000
CR. Cash 1000
Transaction 8:
March 1
DR. Furniture and Fixtures 4000
CR. Cash 1000
CR. Notes Payable 3000
March 31
DR. Depreciation expense 100
CR. Furniture and Fixtures 100
March 31
DR. Interest Expense 48.75
CR. Interest Payable 48.75
Transaction 9:
DR. Dividends 4200
CR. Cash 4200