Question

Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows. 1. 2. 3. 4. 5. 6. 7. 8. Issued stock to investors for $14,600 in cash. Purchased used car for $10,100 cash for use in business. Purchased supplies on account for $340. Billed customers $5.510 for services performed Paid $150 cash for advertising start of the business Received $1,100 cash from customers billed in transaction (4) Paid creditor $420 cash on account. Pald dividends of $470 cash to stockholders. For each transaction indicate the basic type of account debited and credited (asset, liability, stockholders' equity); the specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.); whether the specific account is increased or decreased, and the normal balance of the specific account Account Debited Specific Account Cash Basic Type Stockholders' Equity Account Credited Specific Account Common Stock Effect Increase Normal Balance Credit Debit

Answer 1

Answer: Account Debited Specific Effect Account Account Credited Specific Effect Account Normal Balance Basic Type Basic Type Normal Balance Asset Cash Increase Debit Common Stock Increase Credit Stockholders' Equity Asset Asset Equipment Increase Debit Decrease Debit Asset Supplies Increase Debit Liability Increase Credit Cash Accounts Payable Service Revenue Asset Increase Debit Stockholders' Equity Increase Credit milio Accounts Receivable Advertising Expense Stockholders' Equity Increase Debit Asset Cash Decrease Debit Asset Cash Increase Debit Asset Accounts Receivable Decrease Debit Liability Accounts Payable Decrease Credit Asset Cash Decrease Debit 100 Stockholders' Equity Dividend Increase Debit Asset Cash Decrease Debit