Financial Statements
Week Three Exercises
Fatma Miljkovic
ACC/290
March 25, 2013
Professor: Tim Callaghan
| BE4-1 | Transactions that affect earnings do not necessarily affect cash. |
Hint: Identify impact of transactions on cash and net income.(SO 2, 9) | | |
InstructionsIdentify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example. | | | | | Cash | Net Income | (a) | Purchased $100 of supplies for cash. Debit |CreditCash |$100Supplies $100 |_____Assets = Liability + Owner EquityDr | Cr$100 (supplies) | $100 (cash) $0 = $0$100 Cash is spend what is credit, but $assets increase for $100 in supplies what does not affect assets or net income | -$100 | $ 0 | (b) | Recorded an adjusting entry to record use of $30 of the above supplies.Supplies Supplies Expense $100 | $30 __ Adj. $30 |_______Bal. $70 | Bal. $30 | | (c) | Made sales of $1,300, all on account. Debit | CreditAccount Receivable $1,300 |Service Revenue | $1,300 | (d) | Received $800 from customers in payment of their accounts. Debit | CreditCash $800 |Account Receivable | $800 | (e) |
Fatma Miljkovic
ACC/290
March 25, 2013
Professor: Tim Callaghan
| BE4-1 | Transactions that affect earnings do not necessarily affect cash. |
Hint: Identify impact of transactions on cash and net income.(SO 2, 9) | | |
InstructionsIdentify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example. | | | | | Cash | Net Income | (a) | Purchased $100 of supplies for cash. Debit |CreditCash |$100Supplies $100 |_____Assets = Liability + Owner EquityDr | Cr$100 (supplies) | $100 (cash) $0 = $0$100 Cash is spend what is credit, but $assets increase for $100 in supplies what does not affect assets or net income | -$100 | $ 0 | (b) | Recorded an adjusting entry to record use of $30 of the above supplies.Supplies Supplies Expense $100 | $30 __ Adj. $30 |_______Bal. $70 | Bal. $30 | | (c) | Made sales of $1,300, all on account. Debit | CreditAccount Receivable $1,300 |Service Revenue | $1,300 | (d) | Received $800 from customers in payment of their accounts. Debit | CreditCash $800 |Account Receivable | $800 | (e) |