1. E2-29B. (Learning Objective 4: Analyze the impact of business transactions on accounts) The following selected events were experienced by either Bishop Industries, Inc., a corporation, or Kate Bishop, the major stockholder. State whether each event (1) increased, (2) decreased, or (3) had no effect on the total assets of the business. Identify any specic asset affected. a. Sold land and received a note receivable of $43,000 (the land was carried on the companys books at $43,000). b. Received $140,000 cash and issued stock to a stockholder. c. Purchased equipment for the business for $81,000 cash. d. Received $37,000 cash from customers for services performed. e. Purchased land for a building site for the business and signed a $98,000 promissory note to the bank. f. Earned $15,000 in revenue for services performed. The customer promises to pay Bishop Industries in one month. g. Paid $12,000 cash on accounts payable. h. Purchased supplies on account for $4,000. i. Bishop used personal funds to purchase a pool table for her home. j. The business paid Bishop a cash dividend of $4,500 .

2. E2-33B. (Learning Objectives 1, 4, 5: Explain what a transaction is; analyze the impact of business transactions on accounts; record [journalize] transactions in the books) The rst seven transactions of Big Horn Advertising, Inc., have been posted to the companys accounts: Cash 8,600 7,500 70.

3. E2-36B. (Learning Objective 4: Analyze the impact of business transactions on accounts) Set up the following T-accounts: Cash, Accounts Receivable, Office Supplies, Office Furniture, Accounts Payable, Common Stock, Dividends, Service Revenue, Salary Expense, and Rent Expense. Record the following transactions directly in the T-accounts without using a journal. Use the letters to identify the transactions. a. Eric Newton opened a law rm by investing $23,000 cash and office furniture with a fair value of $9,400. Organized as a professional corporation, the business issued common stock to Newton. b. Paid monthly rent of $1,000. c. Purchased office supplies on account, $700. d. Paid employee salaries of $2,500. e. Paid $150 of the accounts payable created in transaction c. f. Performed legal service on account, $10,900. g. Declared and paid dividends of $2,000. (1) (2) (5) Supplies (5) 70 Land (4) 36,0007,000 230 3,500 (4) (6) (7) (3) 800 Equipment (7) 3,500 Accounts Payable (3) 800(6) 230 Note Payable (2) (4) 7,500 29,000 Common Stock (1) 8,600 M02_HARR7620_11_SE_C02_060-120.indd 104 11/13/15 5:26 PM Transaction Analysis 105 Requirement 1. Prepare the journal entries that served as the sources for the seven transactions. Include an explanation for each entry. As Big Horn moves into the next period, how much cash does the business have? How much does Big Horn owe in total liabilities?

4. P2-68B. (Learning Objectives 4, 5, 6: Analyze the impact of business transactions on accounts; record [journalize and post] transactions in the books; construct and use a trial balance) During the rst month of operations, Gagne Services, Inc., completed the following transactions: M02_HARR7620_11_SE_C02_060-120.indd 112 11/13/15 5:26 PM Transaction Analysis 113 Jul 2 Gagne received $62,000 cash and issued common stock to the stockholders. 3 Purchased supplies, $800, and equipment, $12,100, on account. 4 Performed services for a customer and received cash, $5,600. 7 Paid cash to acquire land, $39,000. 11 Performed services for a customer and billed the customer, $2,900. 16 Paid for the equipment purchased July 3 on account. 17 Received and paid the telephone bill, $590. 18 Received partial payment from customer on account, $800. 22 Received and paid the water and electricity bills, $420. 29 Received $2,300 cash for servicing the heating unit of a customer. 30 Paid employee salaries, $2,500. 30 Declared and paid dividends of $2,000. Gagne expects to collect within one month. Requirements 1. Record each transaction in the journal. Be sure to record the date in each entry. Explanations are not required. 2. Post the transactions to the T-accounts, using transaction dates as posting references. 3. Prepare the trial balance of Gagne Services, Inc., at July 31 of the current year. 4. John Gagne, the manager, asks you how much in total resources the business has to work with, how much it owes, and whether July was profitable (and by how much).

5. P2-69B. (Learning Objectives 4, 6: Analyze the impact of business transactions on accounts; construct and use a trial balance) During the rst month of operations (May 2016), Spahr Music Corporation completed the following selected transactions: a. The business received cash of $50,000 and a building with a fair value of $106,000. The corporation issued common stock to the stockholders. b. Borrowed $63,000 from the bank; signed a note payable. c. Paid $44,000 for music equipment. d. Purchased supplies on account, $210. e. Paid employees salaries, $5,900. f. Received $3,700 for music service performed for customers. g. Performed service for customers on account, $13,100. h. Paid $200 of the account payable created in transaction d. i. Received a $600 bill for utilities expense that will be paid in the near future. j. Received cash on account, $1,700. k. Paid the following cash expenses: (1) rent, $1,200; (2) advertising, $300.