Question

1-a. Prepare the Horizontal model for each of the following transactions. a. The purchase of the paper napkins, assuming that the purchase was initially recorded as an expense b. At January 31, it was estimated that the cost of the paper napkins used during the first three weeks of the semester totaled C. The purchase of the paper napkins, assuming that the purchase was initially recorded as an asset d. At January 31 if the initial purchase had been recorded as in c. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect. Balance Sheet Income Statement Assets = Liabilities Stockholders Equity Net income Revenues - Exp 14

Answer 1

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Part 1a
		Assets	Liabilities	Stockholders Equity	Net Income	Revenue	Expenses
a		$ (4,700)		$                            (4,700)	$           (4,700)		$        4,700
b	$4,700-$960	$    3,740		$                              3,740	$             3,740		$      (3,740)
c	Supplies	$    4,700
	Cash	$ (4,700)
d		$      (960)					$            960
1B Journal Entries:
a	Supplies Expenses	$    4,700
	Cash		$         4,700
	(To record purchases as expenses)
b	Supplies-Paper Napkins	$    3,740
	Supplies Expense		$         3,740
	(To record ending balance) $4,700-$960
c	Supplies-Paper Napkins	$    4,700
	Cash		$         4,700
	(To record purchases of paper napkins)
d	Supplies Expenses	$        960
	Supplies-Paper Napkins		$            960
	(To record actual expense)
Part 2
a	Same expense of	$        960
b	Same asset of	$    3,740