The following transactions took place at Professional Counseling Services, a business established by Greta Davis.
INSTRUCTIONS
For each transaction, set up T accounts from this list: Cash; Office Furniture; Office Equipment; Automobile; Accounts Payable; Greta Davis, Capital; and Greta Davis, Drawing. Analyze each transaction. Record the amounts in the T accounts affected by that transaction. Use plus and minus signs to show increases and decreases in each account.
TRANSACTIONS
1. Greta Davis invested $60,000 cash in the business.
2. Purchased office furniture for $16,000 in cash.
3. Bought a fax machine for $950; payment is due in 30 days.
4. Purchased a used car for the firm for $16,000 in cash.
5. Davis invested an additional $10,000 cash in the business.
6. Bought a new computer for $3,000; payment is due in 60 days.
7. Paid $950 to settle the amount owed on the fax machine.
8. Davis withdrew $4,000 in cash for personal expenses.
Analyze: Which transactions affected asset accounts?
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