Section Two:

The Draper Company Records these journal entries:

Cash received for services in advance	$40
Accrued Expense	$17
Used portion of Prepaid Insurance	$12

Required:

Indicate the net effect of these journal entries on the following items. Indicate the dollar amount of the effect and the direction of the effect. (Example: $13 Increase, or $8 Decrease, or NO EFFECT)

1. Net Income $_______________
2. Total Assets $_______________
3. Total Liabilities $_______________
4. Retained Earnings $_______________
5. Total Equity $_______________
6. Working Capital $_______________