Selected transactions for B. Madar SE, an interior decorating firm, in its first month of business, are shown below.

Jan. 2 3 9 11 16 20 23 28

Invested 15,000 cash in the business in exchange for ordinary shares. Purchased used car for 7,000 cash for use in the business.

Purchased supplies on account for 500.

1,800 of services were performed and billed.

Paid 200 cash for advertising.

Received 700 cash from customers billed on January 11. Paid creditor 300 cash on balance owed.

Declared and paid a 1,000 cash dividend.

Instructions

For each transaction indicate the following.

(a) The basic type of account debited and credited (asset, liability, equity).

(b) The specific account debited and credited (cash, rent expense, service revenue, etc.). (c) Whether the specific account is increased or decreased.

(d) The normal balance of the specific account.

Use the following format, in which the January 2 transaction is given as an example.

Account Debited Account Credited

(a) (b) (c) (d) (a) (b) (c) (d) Basic Specific Normal Basic Specific Normal Date Type Account Effect Balance Type Account Effect Balance

Exercises 85

Jan. 2 Asset Cash Increase Debit Equity Share Increase Capital

E2-3 Data for B. Madar SE, interior decorating, are presented in E2-2. Instructions

Journalize the transactions using journal page J1. (You may omit explanations.) E2-4 Presented below is information related to Beijing Real Estate Agency Ltd.

Credit

Oct. 1

2 3 6

27 30

Lynn Robbins begins business as a real estate agent with a cash investment of 200,000 in exchange for ordinary shares.

Hires an administrative assistant.

Purchases office furniture for 19,000, on account.

Sells a house and lot for N. Fennig; bills N. Fennig 32,000 for realty services performed.

Pays 8,500 on the balance related to the transaction of October 3.

Pays the administrative assistant 25,000 in salary for October.

Journalize transactions.

(LO 4)

Analyze transactions and determine their effect on accounts.

(LO 2)

Journalize transactions.

(LO 4)

Analyze transactions and journalize.

(LO 2, 3, 4)

Analyze transactions and journalize.

(LO 2, 3, 4)

Analyze statements about the ledger.

(LO 5)

Instructions

Prepare the debit-credit analysis for each transaction as illustrated on pages 6570.