Question
After completing her first year of operations, Penny Cassidy used a number of ratios to evaluate the performance of Penny's Pool Service & Supply, Inc.
After completing her first year of operations, Penny Cassidy used a number of ratios to evaluate the performance of Penny's Pool Service & Supply, Inc. She was particularly interested in the effects of the following transactions from the last quarter:
A) Paid herself a dividend of $10,000 as the sole stockholder..
B)Recorded advance payments from customers of $2,000..
C)Paid the current months rent in cash, $500..
D)Purchased a new truck for $14,000 and signed a note payable for the whole amount. The truck was not placed in service until January 2015..
E)Recorded depreciation expense on office equipment of $600..
F)Accrued interest expense on the note payable to the bank was $400..
Complete the following table, select the effects of each transaction on each financial statement category listed. (Indicate the amount and use positive value for increase, negative value for decrease, and zero for a net effect of zero.)
Transaction | Gross Profit | Opating Income (Loss) | Current Assets |
a. | |||
b. | |||
c. | |||
d. | |||
e. | |||
f. |
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