Inflatable Fun For You $($IFFY$)$ is your own business. You own two inflatable bouncy castles. Kids love them! You keep them in your large garage $($deflated$,$ of course$)$ and drive your own truck to parks and neighbourhood special events. You use your own cell phone to take reservations for private parties and events.. Your first summer month's transactions are listed below. Answer the question that follows each one. May $1-$ You set up a business bank account and get a business credit card. The bank will charge a fee of $$12$ at the end of each month. How will IFFY record the May $1$ transaction? $(1$ point$)$Multiple choice $1$ Question $11$no entry needed decrease both Cash and Owners Capital,decrease Cash and increase Accounts Payable, decrease Cash and increase Bank Loan Payable, decrease Cash and increase Bank Charges Expense, May $2-$ You deposit $$3,000$ of your own money into the business bank account to start the business. How will IFFY record the May $2$ transaction? $(1$ point$)$Multiple choice $2$ Question $11$increase both Cash and Revenue increase both Cash and Bank Loan Payable increase both Cash and Owners Capitalincrease both Cash and Accounts Payable increase both Cash and Retained Earnings May $3-$ You borrow $$4\mathrm{.}000$ from the bank. How will IFFY record the May $3$ transaction? $(1$ point$)$Multiple choice $3$ Question $11$increase both Cash and Bank Loan Payable increase both Cash and Accounts Payable increase both Cash and Retained Earnings increase both Cash and Revenue increase both Cash and Owners Capital May $4$ You register your business name with Service Ontario for $$60,$ using the business credit card. How will IFFY record the May $4$ transaction? $(1$ point$)$Multiple choice $4$ Question $11$increase Accounts Payable and decrease Cash no entry because a business name is intangible increase Business Licence and decrease Cashincrease both Business Licence and Accounts Payable increase Office Expense and decrease Cash May $6-$ You purchase, using the business credit card, power tools for $$2,000$ which already includes HST$.$ You expect the tools to last more than a year. How will IFFY classify the tools purchased on May $6$ on the balance sheet? $(1$ point$)$Multiple choice $5$ Question $11$prepaid advertising deferred revenue supplies equipmentexpense May $7-$ You purchase, using the business credit card, supplies $($i$.$e$.$ compressed air$)$ for $$500$ plus HST$.$ How will IFFY record the May $7$ transaction? $(1$ point$)$Multiple choice $6$ Question $11$increase both Supplies and Accounts Payable by $$565$ increase both Supplies Expense and Accounts Payable by $$565$ increase both Supplies Expense and Accounts Payable by $$500$ increase both Supplies and Accounts Payable by $$500$ increase both Equipment and Accounts Payable by $$565$ May $8-$ You buy a one$-$year liability insurance policy for $$2,400,$ plus $8\%$ tax, paying cash. How will IFFY record the May $8$ transaction? $(1$ point$)$Multiple choice $7$ Question $11$Increase both Prepaid Insurance and Accounts Payable by $$2,592$ Increase both Prepaid Insurance and Accounts Payable by $$2,400$ increase Insurance Expense and decrease Cash by $$2,400$ increase Insurance Expense and decrease Cash by $$2,592$ increase Prepaid Insurance and decrease Cash by $$2,592$ May $10-$ You purchase for $$200$ cash, plus HST$,150$ flyers to advertise your business. None of the flyers have been delivered yet. How will IFFY record the May $10$ transaction? $(1$ point$)$Multiple choice $8$ Question $11$increase both Prepaid Advertising and Accounts Payable by $$226$ increase both Advertising Expense and Accounts Payable by $$226$ increase Prepaid Advertising and decrease Cash by $$226$increase Prepaid Advertising and decrease Cash by $$200$ increase Advertising Expense and decrease Cash by $$226$ May $11-$ You pay a student $$60$ cash to deliver half of your flyers to the homes in your area. How will IFFY record the May $11$ transaction? $(4$ points$)$decrease Cash by $$173$ decrease Wages Expense by $$60$ increase Advertising Expense by $$113$ increase Cash by $$60$ increase Wages Expense by $$60$ decrease Prepaid Advertising by $$113$ increase Cash by $$173$increase Prepaid Advertising by $$113$ decrease Cash by $$60$ decrease Advertising Expense by $$113$ May $12-$ You gave a quotation to a prospective block party organizer, to see if he liked it and would recommend you to his friends.. You would normally have asked for a $$100$ deposit, but as you are just starting out, you didnt do that this time. How will IFFY record the May $12$ transaction? $(1$ point$)$Multiple choice $9$ Question $11$increase both Accounts Receivable and Service Revenue by $$100$ increase both Cash and Deferred Revenue by $$100$ no entry is needed increase both Accounts Receivable and Deferred Revenue by $$100$increase both Cash and Service Revenue by $$100$ May $15-$ Two more customers hire you to set up their events. You will charge them each $$500$ when you finish the job. They EACH give you a $$100$ cash deposit. How will IFFY record the May $15$ transaction? $(1$ point$)$Multiple choice $10$ Question $11$increase both Accounts Receivable and Deferred Revenue by $$200$no entry is needed until the jobs are done increase both Accounts Receivable and Service Revenue by $$200$ increase both Cash and Service Revenue by $$200$ increase both Cash and Deferred Revenue by $$200$ May $27-$ Business is inflating! So far you have collected $$2,000$ in cash from the parents of happy party$-$goers. How will IFFY record the May $27$ transaction? $(1$ point$)$Multiple choice $11$ Question $11$increase both Cash and Service Revenue by $$2,000$ increase both Accounts Receivable and Service Revenue by $$2,000$ no entry is needed increase both Accounts Receivable and Deferred Revenue by $$2,000$increase both Cash and Deferred Revenue by $$2,000$ May $28$ You have only $$150$ worth of supplies left. You have used up the rest of the supplies that you bought on May $7.$ How will IFFY record the May $28$ transaction? $(1$ point$)$Multiple choice $12$ Question $11$increase Supplies Expense and decrease Supplies by $$565$increase Supplies Expense and decrease Supplies by $$415$ decrease Supplies Expense and increase Supplies by $$150$ increase Supplies Expense and decrease Supplies by $$150$ increase Supplies and decrease Supplies Expense by $$415$ May $29-$ You spent $$156$ from your personal funds in travel expenses this month. Half of this was business travel and the business pays you cash from the business bank account to reimburse you. How will IFFY record the May $29$ transaction? $(1$ point$)$Multiple choice $13$ Question $11$decrease Cash and increase Travel Expense by $$88$ decrease Cash by $$88,$ increase Accounts Payable by $$88,$ and increase Travel Expense by $$156$increase both Accounts Payable and Travel Expense by $$88$ increase both Accounts Payable and Travel Expense by $$156$ decrease Cash and increase Travel Expense by $$156$ May $30-$ You received your cell phone bill for the month of May. Of the $$80,$ three$-$quarters $($i$.$e$.75\%)$ was for business calls. The company will reimburse you from the business bank account for the amount owed to you, next month when you pay the bill. How will IFFY record the May $30$ transaction? $(1$ point$)$Multiple choice $14$ Question $11$increase both Accounts Payable and Phone Expense by $$60$ decrease Cash and increase Phone Expense by $$80$ decrease Cash and increase Phone Expense by $$60$ decrease Cash by $$60,$ increase Accounts Payable by $$20,$ and increase Phone Expense by $$80$increase both Accounts Payable and Phone Expense by $$80$ May $31$ You have now used up one month of your insurance coverage. How will IFFY record the use of the insurance on May $31?(1$ point$)$Multiple choice $15$ Question $11$no entry required until the insurance policy expiresdecrease Prepaid Insurance by $$2,592$ and increase Insurance Expense by $$2,592$ decrease Prepaid Insurance by $$2,400$ and increase Insurance Expense by $$2,400..$decrease Prepaid Insurance by $$200$ and increase Insurance Expense by $$200$ decrease Prepaid Insurance by $$216$ and increase Insurance Expense by $$216$ May $31-$ The bank takes its monthly charge from the business bank account, plus an additional $$16$ for interest on your loan. How will IFFY record the bank transaction on May $31?(3$ points$)$decrease Bank Charges Expense by $$12$ decrease Interest Expense by $$16$ increase Bank Loan Payable by $$16$ increase Interest Expense by $$16$ increase Bank Charges Expense by $$12$ decrease Cash by $$28$ decrease Bank Loan Payable by $$16$ increase Cash by $$28$increase Interest Expense by $$28$ May $31-$ One of your May $15$ customers held his event today. He will pay you his balance next week. The other customer's party is next weekend. How will IFFY record this May $31$ transaction?Multiple choice $16$ Question $11$increase both Accounts Receivable and Service Revenue by $$500$ Increase Accounts Receivable by $$400,$ increase Service Revenue by $$500,$ and decrease Deferred Revenue by $$100$no entry is required until you receive the cash increase both Cash and Deferred Revenue by $$400$ increase both Accounts Receivable and Deferred Revenue by $$400$ increase both Cash and Service Revenue by $$500(1$ point$)$ May $31$ You pay four$-$fifths $($i$.$e$.80\%)$ of the balance owing on the business credit card. How will IFFY record this May $31$ transaction? $(1$ point$)$Multiple choice $17$ Question $11$decrease both Cash and Accounts Payable, $$3,565$ decrease both Cash and Accounts Payable, $$2,945$ decrease both Cash and Accounts Payable, $$685$decrease both Cash and Accounts Payable, $$3,425$ decrease both Cash and Accounts Payable, $$2,900$ What are the total liabilities on IFFYs balance sheet on May $31?(2$ points$)$Answer $1$ Question $11$What is IFFYs total Service Revenue for the month of May? $(2$ points$)$Answer $2$ Question $11$ If you were producing the company's December $31$ year end financial statements, what would be the balance in IFFY's Prepaid Insurance account at that date? $(2$ points$)$Answer $3$ Question $11$