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) decrease both Cash and Owners Capital, decrease Cash and increase Bank Charges Expense, no entry needed decrease Cash and increase Accounts Payable, decrease Cash and increase Bank Loan Payable, 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) increase both Cash and Accounts Payable increase both Cash and Retained Earnings increase both Cash and Bank Loan Payable increase both Cash and Revenue increase both Cash and Owners Capital May 3 - You borrow $4.000 from the bank. How will IFFY record the May 3 transaction? (1 point) increase both Cash and Revenue increase both Cash and Owners Capital increase both Cash and Accounts Payable increase both Cash and Retained Earnings increase both Cash and Bank Loan Payable 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) increase Accounts Payable and decrease Cash increase Business Licence and decrease Cash no entry because a business name is intangible increase Office Expense and decrease Cash increase both Business Licence and Accounts Payable 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) equipment supplies deferred revenue prepaid advertising expense 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) increase both Equipment 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 $565 increase both Supplies and Accounts Payable by $500 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) increase Insurance Expense and decrease Cash by $2,400 increase Prepaid Insurance and decrease Cash by $2,592 Increase both Prepaid Insurance and Accounts Payable by $2,592 increase Insurance Expense and decrease Cash by $2,592 Increase both Prepaid Insurance and Accounts Payable by $2,400 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) increase Prepaid Advertising and decrease Cash by $226 increase Advertising Expense and decrease Cash by $226 increase Prepaid Advertising and decrease Cash by $200 increase both Advertising Expense and Accounts Payable by $226 increase both Prepaid Advertising and Accounts Payable 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) increase Wages Expense by $60 decrease Wages Expense by $60 increase Advertising Expense by $113 increase Cash by $173 increase Prepaid Advertising by $113 decrease Prepaid Advertising by $113 decrease Advertising Expense by $113 increase Cash by $60 decrease Cash by $173 decrease Cash by $60 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) increase both Cash and Deferred Revenue by $100 increase both Accounts Receivable and Deferred Revenue by $100 increase both Cash and Service Revenue by $100 no entry is needed increase both Accounts Receivable 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) increase both Cash and Deferred Revenue by $200 increase both Cash and Service Revenue by $200 no entry is needed until the jobs are done increase both Accounts Receivable and Service Revenue by $200 increase both Accounts Receivable 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) increase both Cash and Service Revenue by $2,000 increase both Accounts Receivable and Deferred Revenue by $2,000 increase both Cash and Deferred Revenue by $2,000 increase both Accounts Receivable and Service Revenue by $2,000 no entry is needed 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) increase Supplies Expense and decrease Supplies by $150 increase Supplies Expense and decrease Supplies by $565 increase Supplies and decrease Supplies Expense by $415 decrease Supplies Expense and increase Supplies by $150 increase Supplies Expense and decrease Supplies 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) increase both Accounts Payable and Travel Expense by $88 increase both Accounts Payable and Travel Expense by $156 decrease Cash by $88, increase Accounts Payable by $88, and increase Travel Expense by $156 decrease Cash and increase Travel Expense by $156 decrease Cash and increase Travel Expense by $88 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) decrease Cash and increase Phone Expense by $80 decrease Cash by $60, increase Accounts Payable by $20, and increase Phone Expense by $80 increase both Accounts Payable and Phone Expense by $60 increase both Accounts Payable and Phone Expense by $80 decrease Cash and increase Phone Expense by $60 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) 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 no entry required until the insurance policy expires decrease Prepaid Insurance by $2,592 and increase Insurance Expense by $2,592 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) increase Cash by $28 increase Interest Expense by $28 increase Bank Loan Payable by $16 decrease Bank Loan Payable by $16 decrease Cash by $28 decrease Bank Charges Expense by $12 increase Interest Expense by $16 increase Bank Charges Expense by $12 decrease Interest Expense by $16 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? Increase Accounts Receivable by $400, increase Service Revenue by $500, and decrease Deferred Revenue by $100 increase both Cash and Service Revenue by $500 increase both Accounts Receivable and Deferred Revenue by $400 increase both Cash and Deferred Revenue by $400 increase both Accounts Receivable and Service Revenue by $500 no entry is required until you receive the cash (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) decrease both Cash and Accounts Payable, $685 decrease both Cash and Accounts Payable, $3,565 decrease both Cash and Accounts Payable, $2,945 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 What is IFFYs total Service Revenue for the month of May? (2 points) Answer 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