Furniture Fix-Up 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. You set up a bank account and acquire a business credit card. April 1 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, S4, 100 worth of power tools from Home Depot. HST is already included. April 8 You buy a two-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 S80 cash to distribute 400 of your flyers. You fixed one chair for a customer for free, to see if he liked it and would hire April 12 you for the rest of the set. You would normally have charged him $100. Two more customers hire you to restore their dining room sets. You will charge April 15 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. The business pays from the bank account. April 30 You received your cell phone bill for the month. Of the $88, half were business calls. The business will reimburse you next month. 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. You deliver the furniture to one of the April 15 customers. April 30 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. Record the transactions into the expanded accounting equation using account names. Use that information to answer all of the following questions. Question 76(4 points) How will FFU record the April 11 transaction? Choose ALL that apply. | a) increase Advertising Expense $226 d c 0 | b) decrease Wages Expense $80 Od decrease Advertising Expense $226 d) increase Wages Expense $80 0 c 0 e) increase Cash $80 f) decrease Cash $80 Og) decrease Prepaid Advertising $226 On increase Cash $306 Oi) decrease Cash $306 Oj) increase Prepaid Advertising $226 Question 77 (1 point) How will FFU record the April 12 transaction? a) increase both Cash and Deferred Revenue, $100 b) increase both Accounts Receivable and Deferred Revenue, $100 C a no entry is needed O O d) increase both Cash and Service Revenue, $100 el increase both Accounts Receivable and Service Revenue, $100 Question 78 (1 point) How will FFU record the April 15 transaction? a) increase both Cash and Deferred Revenue $2,000 b) increase both Accounts Receivable and Deferred Revenue $2,000 no entry is needed until the job is complete O O 0 d) increase both Cash and Service Revenue, $2,000 e) increase both Accounts Receivable and Service Revenue, $6,000 Question 79 (1 point) How will FFU record the April 27 transaction? O al increase both Accounts Perpishlo and Sopir Bow $2200 Question 79 (1 point) How will FFU record the April 27 transaction? a) increase both Accounts Receivable and Service Revenue, $2,200 b) increase both Accounts Receivable and Deferred Revenue, $2,200 no entry is needed Od increase both Cash and Service Revenue, $2,200 e) increase both Cash and Deferred Revenue $2,200 Question 80 (1 point) How will FFU record the April 28 transaction? a) Increase Supplies Expense and decrease Supplies, $315 a O O b) Increase Supplies and decrease Supplies Expense, $315 Od Increase Supplies Expense and decrease Supplies, $565 d) Increase Supplies Expense and decrease Supplies, $250 e) Increase Supplies and decrease Supplies Expense, $250 Question 81 (1 point) How will FFU record the April 29 transaction? a) decrease Cash and increase Car Expense $52 b) increase both Accounts Payable and Car Expense, $104 decrease Cash $52, increase Accounts Payable $104, and increase Car Expense $156 Od increase both Accounts Payable and Car Expense, $52 e) decrease Cash and increase Car Expense, $104 a Question 82 (1 point) How will FFU record the April 30 transaction? (the phone bill) a) decrease Cash and increase Phone Expense, $44 O b) increase both Accounts Payable and Phone Expense, $88 Od increase both Accounts Payable and Phone Expense, $44 d) decrease Cash $44, increase Accounts Payable $44, and increase Phone Expense $88 e) el decrease Cash and increase Phone Expense, $88
