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Exercise 1-7 Keystone Computer Timeshare Company entered into the following transactions during May 2017. Describe the effect of each transaction on assets, liabilities, and stockholders'

Exercise 1-7

Keystone Computer Timeshare Company entered into the following transactions during May 2017. Describe the effect of each transaction on assets, liabilities, and stockholders' equity.

1. Purchased computers for $20,000 from Data Equipment on account.

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2. Paid $3,000 cash for May rent on storage space.

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3. Received $15,000 cash from customers for contracts billed in April.

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4. Performed computer services for Ryan Construction Company for $2,700 cash.

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5. Paid Midland Power Co. $11,000 cash for energy usage in May.

image text in transcribed Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity

6. Stockholders invested an additional $32,000 in the business.

image text in transcribed Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity

7. Paid Data Equipment for the computers purchased in (1) above.

image text in transcribed Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity

8. Incurred advertising expense for May of $840 on account.

image text in transcribed Increase in assets, increase in liabilitiesIncrease in assets, increase in stockholders' equityIncrease in assets, decrease in liabilitiesIncrease in assets, decrease in stockholders' equityIncrease in assets, decrease in assetsIncrease in liabilities, increase in stockholders' equityIncrease in liabilities, decrease in liabilitiesIncrease in liabilities, decrease in stockholders' equityIncrease in liabilities, decrease in assetsIncrease in stockholders' equity, decrease in assetsIncrease in stockholders' equity, decrease in liabilitiesIncrease in stockholders' equity, decrease in stockholders' equityDecrease in assets, decrease in liabilitiesDecrease in assets, decrease in stockholders' equityDecrease in liabilities, decrease in stockholders' equity

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