Question

Exercise 1-7 Keystone Computer Timeshare Company entered into the following transactions during May 2019 Describe the effect of each transaction on assets, liabilities, and stockholders' equity 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. Click if you would like to Show Work for this question: Open Show Work

Answer 1

1

Purchased computers for $20,000 from Date Equipment on account

increase in assets and increase in liabilities

2

Paid $3,000 cash for May rent on storage space

decrease in assets and decrease in

stockholders Equity

3

Received $15,000 cash from customers for contracts billed

increase in assets and decrease in assets

in April

4

Performed computer services for Ryan construction company

increase in assets and increase in stockholders

for $2,700 cash

Equity

5

paid Midland Power Co.$11,000 cash for energy usage in May

decrease in assets and decrease in

stockholders Equity

6

Stockholders invested an addittional $32,000 in the business

increase in assets and increase in

stockholders equity

7

Paid Data Equipment for the computers purchased in (1)

decrease in assets and decrease in

above

liabilities

8

Incurred advertising expense for May of $840 on account

increase in liabilities and decrease in

stockholders Equity