Question
Analyze each transaction. Under each category in the accounting equation, indicate whether the transaction: A. increases, B. decreases, or C. has no effect. The item
Analyze each transaction. Under each category in the accounting equation, indicate whether the transaction:
A. increases,
B. decreases, or
C. has no effect. The item (a) is provided as an example.
- Provided services to a customer on account. (Revenue increases causing Stockholders Equity to increase, Assets increase, and no effect on Liabilities).
6. Collected from customers for services provided on account.
7. Incurred salaries for the month, will pay next week.
8. Purchased office equipment and will pay vendor later.
| Asset | Liability | Stockholders Equity |
(a) | A | C | A |
6. |
|
|
|
7. |
|
|
|
8. |
|
|
|
9. At the beginning of January, the balance in the Retained Earnings account is $210,000 for BMJ Corporation. During the month of January, BMJ had the following external transactions.
(a) | Pay rent for the month | $5,000 |
(b) | Provide services to customers in exchange for cash | 150,000 |
(c) | Provide services to customers on account | 80,000 |
(d) | Issue common stock for cash | 100,000 |
(e) | Purchase equipment and pay cash | 125,000 |
(f) | Pay workers' salaries for the month | 140,000 |
(g) | Pay dividends to stockholders | 40,000 |
$______________Determine ending Retained Earnings for January 31st.
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