Question

Question 10

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.		Select an effect Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity
2.		Paid $3,000 cash for May rent on storage space.		Select an effect Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity
3.		Received $15,000 cash from customers for contracts billed in April.		Select an effect Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity
4.		Performed computer services for Ryan Construction Company for $2,700 cash.		Select an effect Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity
5.		Paid Midland Power Co. $11,000 cash for energy usage in May.		Select an effect Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity
6.		Stockholders invested an additional $32,000 in the business.		Select an effect Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity
7.		Paid Data Equipment for the computers purchased in (1) above.		Select an effect Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity
8.		Incurred advertising expense for May of $840 on account.		Select an effect Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity

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Answer 1

Describe the effect of each transaction on assets, liabilities, and stockholders' equity.

1.		Purchased computers for $20,000 from Data Equipment on account.		Increase in assets, increase in liabilities
2.		Paid $3,000 cash for May rent on storage space.		Decrease in assets, decrease in stockholders' equity
3.		Received $15,000 cash from customers for contracts billed in April.		Increase in assets, decrease in assets
4.		Performed computer services for Ryan Construction Company for $2,700 cash.		Increase in assets, increase in stockholders' equity
5.		Paid Midland Power Co. $11,000 cash for energy usage in May.		Decrease in assets, decrease in stockholders' equity
6.		Stockholders invested an additional $32,000 in the business.		Increase in assets, increase in stockholders' equity
7.		Paid Data Equipment for the computers purchased in (1) above.		Decrease in assets, decrease in liabilities
8.		Incurred advertising expense for May of $840 on account.		Increase in liabilities, decrease in stockholders' equity