Exercise 3-16 Transaction Analysis Tsunami, Inc., entered into the following transactions during one month of operations: Required:

a. Indicate the specific accounts affected by each transaction.

b. Indicate whether those accounts were increased or decreased.

c. Designate the normal balances for each of the specific accounts. Transaction Accounts Increased/ Decreased Normal Balance

1. Purchased $3,000 of computer equipment on account. _________________ _________________ _________________ _________________ _________________ _________________

2. Issued $7,500 of common stock to investors in exchange for cash. _________________ _________________ _________________ _________________ _________________ _________________

3. Purchased supplies for $300 in cash. _________________ _________________ _________________ _________________ _________________ _________________

4. Billed customers $25,000 for services rendered. _________________ _________________ _________________ _________________ _________________ _________________

5. Paid salaries of $3,500 to employees. _________________ _________________ _________________ _________________ _________________ _________________

6. Paid dividends to stockholders in the amount of $1,000. _________________ _________________ _________________ _________________ _________________ _________________

7. Received $5,000 cash in payment of services earned and billed in the previous month. _________________ _________________ _________________ _________________ _________________ _________________

8. Paid cash for the purchase in #1. _________________ _________________ _________________ _________________ _________________ _________________

9. Borrowed $50,000 from the bank. _________________ _________________ _________________ _________________ _________________ _________________