Selected transactions for A. Mane Inc., an interior decorator, in her first month of busi-

Identify debits, credits, and ness, are as follows: normal balances.

1. Invested \(\$ 10,000\) cash in business in exchange for common stock.

(SO 2) \(\square\)

2. Purchased used car for \(\$ 4,000\) cash for use in business.

3. Purchased supplies on account for \(\$ 500\).

4. Billed customers \(\$ 1,800\) for services performed.

5. Paid \(\$ 200\) cash for advertising start of business.

6. Received \(\$ 700\) cash from customers billed in (4) above.

7. Paid creditor \(\$ 300\) cash on account.
8. Declared and paid a \(\$ 500\) cash dividend.
\section*{Instructions}
For each transaction indicate

(a) the basic type of account debited and credited (asset, liability, stockholders' equity);

(b) the specific account debited and credited (cash, rent expense, fees earned, etc.);

(c) whether the specific account is increased or decreased; and

(d) the normal balance of the specific account. Use the following format, in which transaction (1) is given as an example:

Transcribed Image Text:

Account Debited Account Credited (a) (b) (c) (d) (a) Trans- Basic Specific action Type Account Effect Normal Balance (1) Asset Cash Increase (b) Specific (c) (d) Normal Account Effect Balance Credit Basic Type Debit Stockholders' Common Increase Equity Stock