Question

Assessing Financial Statement Effects of Transactions
K. Daniels started Daniels Services, a firm providing art services for advertisers, on June 1. The following accounts are needed to record the transactions for June: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Service Fees Earned; Rent Expense; Utilities Expense; and Wages Expense. Record the following transactions for June using the financial statement effects template. (Record each transaction in the order it appears.)

June	1	K. Daniels invested $12,000 cash to begin the business in exchange for common stock.
	2	Paid $950 cash for June rent.
	3	Purchased $6,400 of office equipment on credit.
	6	Purchased $3,800 of art materials and other supplies; the company paid $1,800 cash with the remainder due within 30 days.
	11	Billed clients $4,700 for services rendered.
	17	Collected $3,250 cash from clients on their accounts billed on June 11.
	19	Paid $5,000 cash toward the account for office equipment (see June 3).
	25	Paid $900 cash for dividends.
	30	Paid $350 cash for June utilities.
	30	Paid $2,500 cash for June wages.

Use negative signs with answers, when appropriate.

	Balance Sheet
Transaction		Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
June	1	Answer		Answer		Answer		Answer		Answer
	2	Answer		Answer		Answer		Answer		Answer
	3	Answer		Answer		Answer		Answer		Answer
	6	Answer		Answer		Answer		Answer		Answer
	11	Answer		Answer		Answer		Answer		Answer
	17	Answer		Answer		Answer		Answer		Answer
	19	Answer		Answer		Answer		Answer		Answer
	25	Answer		Answer		Answer		Answer		Answer
	30	Answer		Answer		Answer		Answer		Answer
	30	Answer		Answer		Answer		Answer		Answer

Income Statement
Revenue	-	Expenses	=	Net Income
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For each of the following separate situations, prepare the necessary accounting adjustments using the financial statement effects template.
(a) Unrecorded depreciation on equipment is $720.
(b) The supplies account has a balance of $3,870. Supplies still available at the end of the period total $1,100.
(c) On the date for preparing financial statements, an estimated utilities expense of $430 has been incurred, but no utility bill has yet been received or paid.
(d) On the first day of the current period, rent for four periods was paid and recorded as a $3,200 increase (debit) to prepaid rent and a $3,200 decrease (credit) to cash.
(e) Nine months ago, a one-year service policy was sold to a customer and the seller recorded the cash received by crediting unearned revenue for $1,872. No accounting adjustments have been prepared during the nine-month period. The seller is now preparing annual financial statement.
(f) At the end of the period, employee wages of $965 have been incurred but not paid or recorded.
(g) At the end of the period, $300 of interest has been earned but not yet received or recorded.

Use negative signs with answers, when appropriate.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
(a)	Answer		Answer		Answer		Answer		Answer
(b)	Answer		Answer		Answer		Answer		Answer
(c)	Answer		Answer		Answer		Answer		Answer
(d)	Answer		Answer		Answer		Answer		Answer
(e)	Answer		Answer		Answer		Answer		Answer
(f)	Answer		Answer		Answer		Answer		Answer
(g)	Answer		Answer		Answer		Answer		Answer

Income Statement
Revenue	-	Expenses	=	Net Income
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Answer 1

Dear Student,

As per the Chegg policy, only the first question should be answered. Kindly take note of it.

	Balance Sheet
Transaction		Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
June	1	12000		0		0		12000		0
	2	(950)		0		0		0		(950)
	3	0		6400		6400		0		0
	6	(1800)		3800		2000		0		0
	11	0		4700		0		0		4700
	17	3250		(3250)		0		0		0
	19	(5000)		0		(5000)		0		0
	25	(900)		0		0		0		(900)
	30	(350)		0		0		0		(350)
	30	(2500)		0		0		0		(2500)

Income Statement
Revenue	-	Expenses	=	Net Income
0		0		0
0		950		(950)
0		0		0
0		0		0
4700		0		4700
0		0		0
0		0		0
0		0		0
0		350		(350)
0		2500		(2500)

Cash investment in business increases cash and common stock

Payment of rent decreases cash and results into an expense, so expenses increases and earned capital (retained earnings) decreases

Purchase of office equipment on credit increases non cash assets (Equipment) as well as liabilities (accounts payable)

Purchase of material partly on cash and partly on credit increases non cash assets, decrease cash by the proportion paid and increases liabilities to the proportion of unpaid amount.

Billing clients increase accounts receivable and revenuses

Cash collection from clients reduces accounts receivables (non cash assets) and increases cash

Payment of liabilities reduces both cash and liabilities

Payment of cash dividend reduces cash and earned capital (retained earnings)

Payment for utilities expenses reduces cash and increases expenses which reduces earned capital

Payment for wages reduces cash and increases expenses which reduces earned capital