Question

e newconnectmheducation.com flow connect e tura 3 A2F%2Fconnecteducation.com Finder Chapter 4 Homework Help Seven Submit For each of the following transactions for New Idea Corporation, give the accounting equation effects of the adjustments required at the end of the month on July 31. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) a. Received a $600 utility bill for electricity usage in July to be paid in August. b. Owed wages to 10 employees who worked three days at $100 each per day at the end of July. The company will pay employees at the end of the first week of August c. On July 1, loaned money to an employee who agreed to repay the loan in one year along with $1.200 for one full year of interest. No interest has been recorded yet Liabilities stockholders' Eaulty < Prev 2 of 5 !!! Next >

Answer 1

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New Idea Corporation
Transaction	Asset	=	Liabilities	+	Stockholder's Equity	Reason
a.		=	600.00	+	(600.00)	Utility bill is an expense. It will reduce income which will reduce Stockholder's Equity. As it is not yet paid and will be paid in August so it will be recorded as payable in July and so will increase liabilities.
b.		=	3,000.00	+	(3,000.00)	$ 3,000 is calculated as 10 employees * $ 100 per day* 3 days. Wages are an expense. It will reduce income which will reduce Stockholder's Equity. As it is not yet paid and will be paid in August so it will recorded be as payable in July and so will increase liabilities.
c.	100.00	=		+	100.00	$ 100 is calculated as 1 month interest i.e. $ 1,200/12 month. Interest on loan given is an income. It will increase income which will increase Stockholder's Equity. As it is not yet received and will be received next year so it will be recorded as receivable in July and so will increase assets.