Question

Presented below are a number of economic events, Using the format shown after the transactions, indicate whether the event (including its amount) increased (+), decreased (-), or had no effect (NE) on each element of the accounting equation 1. Purchased supplies on account, $240 2. Provided a service on account, $480. 3. Paid salaries expense, $330. 4. Issued common shares in exchange for cash, $4,840 5. Declared and pald $90 of divldends to shareholders. 6. Received cash from a customer who had previouslybeen billed for services provided, $480 (see item 2). 7. Paid account owed to supplier on account, $240 (see item 1) 8. Paid for insurance in advance, $90. 9. Received cash in advance from a customer for services to be performed in the future, $320 10. Performed the service that the customer previously paid for (see item 9) Use the following format Llabilitles Retained Earnings Acccounts Receivable Supplies Insurance Payable Prepaid Accounts Unearned Revenue Common Shares Transaction 1. 2. 3. 4. 5. 6. Cash Revenues Expenses Declared 8. 10 Total

Answer 1

	Asset				Liabilities			Retained Earning
Transaction	Cash	Account Receivabe	Supplies	Prepaid Innsurance	Account Payable	Unearned Revenue	Common Share	Revenue	Expense	Dividend Decleared	Effect on Accounting Equation
1			240		240						yes
			Increase		Increase
2		480						480			yes
		Increase						Increase
3	-330								-330		yes
	Deccrease								Deccrease
4	4840						4840				yes
	Increase						Increase
5	-90									-90	yes
	Decerease									Decrease
6	480	-480									No
	Increase	Decrease
7	-240				-240						No
	Decrease				Decrease
8	-90			90							No
	Decrease			Increase
9	320					320					yes
	Increase					Increase
10						-320		320			No
						Decreased		Increases
	4890	0	240	90	0	320	4840	480	-330	-90