Chapter 1, 2, 3, 4 & 5 Completing the Accounting Cycle Identify how each of the following separate transactions affects financial statements. For the balance sheet, identify how each transaction affects total assets, total liabilities, and equity. For the income statement, identify how each transaction affects net income. For increases, place a "+" in the column or columns. For decreases, place a "-"in the column or columns. If both an increase and a decrease occur, place a "+/-"in the column or columns. The first transaction is completed as an example S.No. Transaction Balance Sheet Income Statement. Assets Liabilities+ OE 1 Owner invests assets + 2 Buys assets for cash 3 Buys assets on credit 4 Pays expenses with cash Performed service on credit Pays cash on payable from (3) Owner withdraw assets for personal use Perform service for cash Collects cash on receivable from (5) Ordered supplies Borrowed cash from Standard Chartered - Grind lays Bank. Incurred expenses for month on account Made Credit Card sales Made credit purchases of office equipment Completed a project for a client, who will pay within 20 days. Completed services for a client and immediately received in cash. Hired a receptionist to begin work Billed customers for service rendered during the month Salary unpaid Service provided but unbilled Utility bill received Paid cash to settle the account payable Earned revenues for cash and the balances are due At a monthly payment of employed who will join in the next month. Insurance expires Supplies were used during the period. Interest expense of on the notes payable has accrued during the august. Depreciation expense on machinery Advertising expenses on credit Paid the office rent for three months in advance on the law office Traded the old machinery Earned one-third of Rent Revenue collected in advance 5 6 7 8 9 10 11 12 13 14 15 16 17 18. 19 20 21 22 23 24 25 26 27 28 29 30 31 32 a manager was Page | 1 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 70 64 65 68 69 66 67 Unpaid Wages owed to Employees at December Repair Service Revenue earned in December but not yet billed Income Tax Expense for December not accounted for. Salaries accrued but not paid unearned revenue is earned Service provided but unbilled and uncollected Invested cash and machinery in the business. Paid Gas and Oil for the month on truck Cash receipts from the sale of goods Cash receipts from the rendering of services. Cash payments to acquire equity or debt of other entities Interest received Dividends received Cash proceeds from issuing shares Cash payments to owners to acquire or redeem the entity's shares Cash payments to suppliers for goods and services Cash proceeds from issuing debentures, loans, notes, bonds, mortgages and other short or long-term borrowings Repayments of capital of amounts borrowed under finance leases Dividends paid Cash repayments of amounts borrowed Purchase of investments Purchase of property, plant and equipment Purchase of intangible non-current assets Issued Capital stock Paid interest on loan Made contribution to charity Bonds were converted into common stock. Cash dividend were declared & paid Bond payable amounting was redeemed for cash. Land was sold at its book value for cash. Interest expenses were paid in cash. Issue of bonds to purchase a long term assets Issue of ordinary shares for cash Dividend declared but not paid Redemption of non-current interest bearing borrowings Cash paid to repay debts instruments Purchased treasury stock Charges from prepaid expenses