Furniture Fix$-$Up $($FFU$)$ is your own business. You restore and refinish antique wood furniture

making the tables, chairs, desks, cabinets etc, look as good as new.

You use your own car to pick up and deliver pieces, and your own cell phone to take reservations from customer.

Your first month's transactions are listed below.

April $1$ You set up a bank account and acquire a business credit card.

The bank will charge you a fee of $$12$ at the end of each month.

April $2$ You borrow $$1,600$ from the bank.

April $3$ You deposit $$5,000$ of your own money into the business bank

account.

April $4$ Your parents lend you an additional $$5,000.$ They will not charge

you interest, but want to be paid back within three years.

April $5$ You register your business name for $$60$ with Service Ontario,

using the business credit card.

April $6$ You purchase, using your business credit card, supplies $($i$.$e$.$ varnish, shellac$)$

for $$500$ plus HST$.$

April $7$ You purchase, using your business credit card, $$4,100$ worth of power tools

from Home Depot. HST is already included.

April $8$ You buy a one$-$year liability insurance policy for $$2,400,$ plus $8\%$ tax,

paying cash.

April $10$ You purchase for $$300$ cash, plus HST$,600$ flyers to advertise

your business. You haven't used any yet.

April $11$ You pay a student $$80$ cash to distribute $400$ of your flyers.

April $12$ You fixed one chair for a customer for free, to see if he liked it and would hire

you for the rest of the set. You would normally have charged him $$100.$

April $15$ Two more customers hire you to restore their dining room sets. You will charge

them each $$3,000$ when you finish the job. They EACH give you a

$$1,000$ cash deposit.

April $27$ Business is booming! You have so far collected $$2,200$ cash for services

to happy homeowners.

April $28$ You now have only $$250$ worth of supplies left.

April $29$ You spent $$156$ from your personal funds in car expenses this month.

Two$-$thirds of this was business travel, all of which was paid by the business.

April $30$ You received your cell phone bill for the month. Of the $$88,$ half were business

calls. You will pay this peraonally and the business will reimburse you in May.

April $30$ One month of your insurance policy has expired.

April $30$ The bank takes its monthly charge from the business bank account,

plus an additional $$6$ for interest on your loan.

April $30$ You deliver the furniture to one of the April $15$ customers.

He will pay you his balance next week. IGNORE the effect on inventory!

April $30$ You pay two$-$thirds of the balance owing on the business credit card.

You will pay the rest next month.

REQUIRED $-$ Use the above information to answer all of the following questions.

How will FFU record the April $1$ transaction? $(1$ mark$)$

a$.$ No entry is needed.

b$.$ decrease Cash and increase Bank Loan Payable, $$12$

c$.$ decrease Cash and increase Accounts Payable, $$12$

d$.$ increase both Cash and Owner's Capital, $$12$

Enter the letter that corresponds to your choice. $($A B C D$)$

How will FFU record the April $2$ transaction? $(1$ mark$)$

a$.$ increase both Cash and Accounts Payable, $$1,600$

b$.$ increase both Cash and Bank Loan Payable, $$1,600$

c$.$ increase both Cash and Owner's Capital, $$1,600$

d$.$ increase both Cash and Revenue, $$1,600$

e$.$ increase both Cash and Retained Earnings, $$1,600$

Enter the letter that corresponds to your choice. $($A B C D E$)$

How will FFU record the April $3$ transaction? $(1$ mark$)$

a$.$ increase both Cash and Accounts Payable, $$5,000$

b$.$ increase both Cash and Bank Loan Payable, $$5,000$

c$.$ increase both Cash and Owner's Capital, $$5,000$

d$.$ increase both Cash and Revenue, $$5,000$

e$.$ increase both Cash and Retained Earnings, $$5,000$

Enter the letter that corresponds to your choice. $($A B C D E$)$

How will FFU record the April $5$ transaction? $(1$ mark$)$

a$.$ increase both Business Licence and Accounts Payable, $$60$

b$.$ increase Business Licence and decrease Cash, $$60$

c$.$ increase Office Expense and decrease Cash, $$60$

d$.$ increase Accounts Payable and decrease Cash, $$60$

e$.$ No entry is necessary because a business licence is intangible.

Enter the letter that corresponds to your choice. $($A B C D E$)$

How will FFU record the April $6$ transaction? $(1$ mark$)$

a$.$ increase both Equipment and Accounts Payable, $$565$

b$.$ increase Supplies Expense and decrease Cash, $$500$

c$.$ increase Supplies and decrease Cash, $$500$

d$.$ increase both Supplies Expense and Accounts Payable, $$565$

e$.$ increase both Supplies and Accounts Payable, $$565$

Enter the letter that corresponds to your choice. $($A B C D E$)$

How will FFU record the April $7$ transaction? $(1$ mark$)$

a$.$ increase Supplies and decrease Cash, $$4,100$

b$.$ increase both Supplies Expense and Accounts Payable, $$4,100$

c$.$ increase Supplies Expense and decrease Accounts Payable, $$4,100$

d$.$ increase both Supplies and Accounts Payable, $$4,100$

e$.$ Increase both Equipment and Accounts Payable, $$4,100$

f$.$ increase Equipment