Sara Velardi had the following transactions for Preston Business Services for 2021.

1) Provided services on account, $50,000.

2) Purchased $12,500 of office supplies on account.

3) At the end of the year, an adjusting entry was prepared for the supplies that had been used. The amount of office supplies still on hand was $3,300.

Required:

a) Show the effect of the above three events on the accounting equation. (You need to fill in the appropriate headings).

b) Set up the appropriate T-accounts and post each of the above transactions.

c) What is the amount of total assets at the end of 2021? What is the amount of net income for 2021?

Total Assets:

Net Income:

Nelson Company experienced the following transactions during 2021, its first year in operation.

1. Issued $12,000 of common stock to stockholders.

2. Provided $4,600 of services on account.

3. Paid $3,200 cash for operating expenses.

4. Collected $3,800 of cash from accounts receivable.

5. Paid a $200 cash dividend to stockholders.

10) The amount of net income recognized on Nelson Company's 2021 income statement is:

A.$1,400.

B.$800.

C.$1,000.

D.$1,200.

11) The amount of cash shown on Nelson Company's 2021 balance sheet is

A.$12,600

B.$12,400

C.$17,000

D.$1,400.

12) Gomez Company collected $9,000 on September 1, 2021 from a customer for services to be provided over a one-year period beginning on that date. How much revenue would Gomez Company report related to this contract on its income statement for the year ended December 31, 2021?

A.$3,000

B.$9,000

C.$2,250

D.$0

13) The purpose of the accrual basis of accounting is to:

A.Report revenue when received.

B.Match assets and liabilities in the proper period.

C.Report expenses when cash disbursements are made.

D.Match revenues and expenses in the proper period.

14) The left side of a T-account is known as the

A.Credit side.

B.Claims side.

C.Debit side.

D.Equity side

15) Warren Company began the accounting period with a $40,000 debit balance in its accounts receivable account. During the accounting period, the company recorded revenue on account amounting to $55,000. The accounts receivable account at the end of the accounting period contained a $16,000 debit balance. Based on this information, the cash collected from accounts receivable during the period is

A.$79,000

B.$40,000

C.$90,000

D.$111,000

16) Which of the following is increased with a debit?

A.Insurance expense

B.Service revenue

C.Accounts payable

D.Common stock