Question

Daniels Company made the following selected transactions during May: 1. Received cash from sale of stock, $55,000. 2. Paid creditors on account, $7,000. 3. Billed customers for services on account, $2,565. 4. Received cash from customers on account, $8,450. 5. Paid dividends to stockholders, $2,500. 6. Received the utility bill, $160, to be paid next month. Indicate the effect of each transaction on the accounting equation by: a. Account type - (A) assets, (L) liabilities, (SE) stockholders' equity, (R) revenue, and (E) expense b. Name of account c. The amount by of the transaction d. The direction of change (increase or decrease) in the account affected Note: Each transaction has two entries. Enter all amounts as positive numbers. Entry Entry Acct. Type (a) Name of Acct. (b) Amount (c) Increase or Decrease (d) Acct. Type (a) Name of Acct. (b) Amount (c) Increase or Decrease (d) 1 2 $ $ 3 4 5 6

Answer 1

	Entry	Entry
	Acct. Type	Name of acct.	Amount	Increase or decrease	Acct. Type	Name of acct	Amount	Increase or Decrease
	a	b	c	d	a	b	c	d
1	Assets	Cash	55,000	Increase	Stockholders equity	common stock	55,000	Increase
2	Liabilities	Accounts payable	7,000	Decrease	Assets	cash	7,000	Decrease
3	Assets	Accounts receivable	2,565	Increase	Revenue	Service revenue	2,565	Increase
4	Assets	cash	8,450	Increase	Assets	Accounts receivable	8,450	Decrease
5	Stockholders equity	Dividend	2,500	Increase	Assets	cash	2,500	Decrease
6	Stockholders equity	Utility expense	160	Increase	Liabilities	Accounts payable	160	Increase