PE 1-3B Transactions

Cross Country Delivery Service is owned and operated by Pedro Gonzalez. The following selected transactions were completed by Cross Country Delivery Service during May:

1. Received cash from owner as additional investment, $30,050.

2. Paid advertising expense, $11,750.

3. Purchased supplies on account, $7,920.

4. Billed customers for delivery services on account, $25,460.

5. Received cash from customers on account, $16,410.

Indicate the effect of each transaction on the accounting equation elements (Assets,Liabilities, and Owner's Equity).

Also indicate the specific item within the accounting equation element that is affected. To illustrate, the answer to (1) follows:

(1) Asset (Cash) increases by $30,050; Owner's Equity (Pedro Gonzalez, Capital)increases by $30,050

EX 1-12 Transactions OBJ. 4

The following selected transactions were completed by Silverado Delivery Service during February:

1. Received cash from owner as additional investment, $25,000.
2. Purchasedsuppliesforcash,$750.
3. Paid rent for February, $3,000.
4. Paid advertising expense,$1,500.
5. Received cash for providing delivery services, $16,800.
6. Billed customers for delivery services on account, $32,500.
7. Paid creditors on account, $1,400.
8. Received cash from customers on account, $23,770.
9. Determined that the cost of supplies on hand was $275 and $475of supplies had

been used during the month.

10.Paid cash to owner for personal use, $5,000.

Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (10), in a column and inserting at the right of each number the appropriate letter from the following list:

a. Decrease inan asset, decrease in owner's equity.

b. Increase in an asset, increase in owner's equity.

c. Decrease in an asset, decrease in a liability.

d. Increase in an asset, increase in a liability.

e. Increase in an asset, decrease in another asset.

EX 1-13 Nature of transactions 10 puntos

Teri West operates her own catering service. Summary financial data for July are presented in equation form as follows. Each line designated by a number indicates the effect of a transaction on the equation. Eachincrease and decrease in owner's equity,except transaction (5), affects net income.

Assets Liabilities Owner's Capital Cash Supplies + Land Accts TeriWest TeriWest Fees Payable Capital Drawing + Earned - Expenses Bal. 50,000 4,500 95,000 9,500 140,000 1 75,800 75,800 2 (25,000) 25,000 3 (52,500) (52,500 4 1,500 1,500 5 (7,000) (7,000) 6 (5,000) (5,000) 7 (2,250) (2,250) Totals 37,800 2,250 120,000 6,000 140,000 (7,000) 75,800 (54,750)