Determining the Financial Statement Effects of Operating Activities Involving Revenues
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 XI 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. |
a. Craig's collected $ 13,000 from customers for games played in July. | 4 13.000 | NE | + 13,000 | + 13,000 | NE | +13,000 |
b. Craig's sold bowling equipment inventory for $7,000; received $3,000 in cash and the rest on account. [The cost of goods sold (expense) related to these sales is in M3-8e. J |
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c. Craig's received $2.500 from customers on account who purchased merchandise in June. |
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d. The men's and ladies' bowling leagues gave Craig's a deposit of $2,600 for the upcoming fall season. |
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