Question

Obj. 4 Example Exercise 13 Bridgeport Delivery Service is owned and operated by Jerome Foley. The following selected transactions were completed by Bridgeport Delivery Service during February Show Mo How 1. Received cash from owner as additional investment, $40,000. 2. Billed customers for delivery services on account, $13.750. 3. Paid creditors on account, $2.500. 4. Received cash from customers on account, $9.000. 5. Paid cash to owner for personal use. $1,000. Indicate the effect of each transaction on the accounting equation elements (Assets, Liabilities Owner's Equity, Drawing. Revenue and Expense). Also indicate the specific item within the accounting equation elenient that is affected. To illustrate the answer to (1) follows: (1) Asset(Cash) increases by $40,000: Owner's Equity (Jerome Foley Capital) increases by $40,000

Answer 1

Assets Liabilities + Owner's Equity Revenue - expenses - drawings Capital + Capital increased by $ 40000 1 2 3 4 Revenue increased by $ 13750 Cash increased by $ 40000. Accounts receivable increased by $ 13750 Cash decreased by $ 2500. Cash increased by $ 9000. Accounts receivable decreased by $ 9000 Cash decreased by $ 1000. Accounts payable decreased by $ 2500. 5 drawings increased by $ 1000. as a result capital decreased by $ 1000