Determining the Financial Statement Effects of Operating Activities Involving Expenses
The following transactions are July 2011 activities of Craig's Bowling, Inc., which operates several bowling centers (for games and equipment sales). For each of the following transactions, complete the tabulation, indicating the amount and effect (+ for increase and — for decrease) of each transaction. (Remember that A = L + SE. R - E = NI. and NI affects SE through Retained Earnings.) Write NE if there is no effect. The first transaction is provided as an example.
| BALANCE SHEET. | INCOME STATEMENT. | ||||
Transaction. | Assets. | Liabilities. | Stockholders' Equity. | Revenues. | Expenses. | Net Income. |
e. Craig's sold bowling merchandise costing $3.890. [The sale related to the use of this merchandise is in M3-3t.J | −3.890 | NE | −3.890 | NE | + 3.890 | −3.890 |
f. Craig's paid $1.900 on the electricity bill for June (recorded as expense in June). |
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y. Craig's paid 54.700 to employees for work in July. |
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h. Craig's purchased SI.800 in insurance for coverage from July 1 to October 1. |
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i. Craig's paid SI.400 to plumbers for repairing a broken pipe in the restrooms. |
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j. Craig's received the July electricity bill for $2.600 to be paid in August. |
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