Question
Daniels Company is owned and operated by Thomas Daniels. The following selected transactions were completed by Daniels Company during May: 1. Received cash from owner
Daniels Company is owned and operated by Thomas Daniels. The following selected transactions were completed by Daniels Company during May:
1. | Received cash from owner as additional investment $55,000. |
2. | Paid creditors on account $7,000. |
3. | Billed customers for services on account, $2,565. |
4. | Received cash from customers on accounts $8,450. |
5. | Paid cash to owner for personal use, $2,500. |
6. | Received the utility bill $160, to be paid next month. |
Indicate the effect of each transaction on the accounting equation: | ||
1) | By Account type - (A)assets, (L)liabilities, (OE)owners equity, (R)revenue, and (E)expense |
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2) | Name of Account for the entry |
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3) | The amount by of the transaction. |
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4) | Indicate the direction of change in the account that is affected. |
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Note: Each transaction has two entries.
Entry | Entry | |||||||
| Acct Type (1) | Name of Acct (2) | Amount (3) | Increase or Decrease (4) | Acct Type (1) | Name of Acct (2) | Amount (3) | Increase or Decrease (4) |
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The accountant for Franklin Company prepared the following list of account balances from the companys records for the year ended December 31, 2011:
| Fees Earned | $165,000 |
| Cash | $ 30,000 |
| Accounts Receivable | 14,000 |
| Selling Expenses | 44,000 |
| Equipment | 64,000 |
| Franklin, Capital | 27,000 |
| Accounts Payable | 12,000 |
| Interest Income | 3,000 |
| Salaries & Wages Expense | 40,000 |
| Prepaid Rent | 2,000 |
| Income Taxes Payable | 5,000 |
| Income Taxes Expense | 18,000 |
| Notes Payable | 20,000 |
| Rent Expense | 20,000 |
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