Three former college classmates have decided to pool a variety of work experienc
ID: 2524833 • 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 Required: Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts that are affected, whether they increase or decrease, and the amount of the increase or decrease. YOU MUST FOLLOW THE INSTRUCTIONS BELOW, IF YOU DON'T, YOU MAY KNOW THE CORRECT ENTRY BUT THE COMPUTER WILL NOT RECOGNIZE IT AND YOU WILL NOT RECEIVE CREDIT 1. After each transaction description, there are several "Account" submission boxes and corresponding "Amount" submission boxes. To indicate the accounts that you think are affected, choose them from the drop-down menu. But you MUST select them in the order that they are listed in the menu. FOR EXAMPLE, if you think that Cash and Inventory are affected by a particular transaction, you must record the Cash impact first and the Inventory impact second because that is the order in which they are listed in the drop-down menu. If you record the Inventory impact first and the Cash impact second, even if they are the correct accounts and even if you have the correct dollar amounts, your answer will be considered incorredct 2. When you record the dollar amounts, be sure to use a minus sign to indicate a decrease in the account. You don't need to use a plus sign to indicate an increase. 3. There are always more "Account and "Amount" submission boxes available than are necessary. When you have indicatethe accounts that are affected by the transaction, you MUST select "Leave Blank" from the drop-down menu for EACH of the remaining "Account" submission boxes (you can leave the "Amount" boxes blank) 4. For transactions 3, 4, 5, and 8, you are given additional instructions. Read them carefully You get 5 tries for each transaction (8 tries for transaction #8) he entries for each transaction are worth 2 points (4 points for transaction #8).Explanation / Answer
Increase $36,000
Transaction Cash Accounts Receivable Inventory Prepaid rent Fixtures and equipment Accounts payable Interest payable Wages payable Notes payable Paid-in Capital Retained earnings 1 Increase $38,000 Increase $38,000 2 Decrease $14,400 Increase $36,000 Increase $21,600 3 Decrease $2,000 Increase $2,000 4 Decrease $8,000 I Increase $8,000 5 Increase $24,000Increase $36,000
Decrease $40,000 Increase $20,000 6 Decrease $8,000 Increase $3,500 Decrease $11,500 7 Decrease $1,200 Decrease $1,200 8 Decrease $1,500 Increase $6,000 Increase $4,500 9 Decrease $4,400 Decrease $4,400 Depreciation Transaction8 Decrease $750 Decrease $750 Interest due Transaction8 Increase $247.5 Decrease $247.5