Enter the following column headings across top of the paper:
Transaction/ Assets Liabilities Owners Equity Net income
a. +700 +700
Enter the transaction/situation letter in the first column and show the effect, if any, of the transaction entry or adjustment on the appropriate balance sheet category or on the income statement by entering the amount and indicating whether it is an addition (+) or a subtraction (-), Column headings reflect the extended balance sheet equation; items that affect net income should not be shown as affection owners equity. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category. Transaction (a) has been completed above as an illustration.
a. During the month, Supplies expense was debited $2,600 for supplies purchased. The cost of supplies used during the month was $1,900. Record the adjustment to property reflect the amount of supplies used and supplies still on hand at the end of the month.
b. Independent of transaction a, assume that during the month, Supplies (asset) was debited $2,600 for supplies purchased. The total cost of supplies used during the month was $1,900, Record the adjustment to properly reflect the amount of supplies still on hand at the end of the month.
c. Received $1,700 of cash from clients for services provided during the current month.
d. Paid $950 of accounts payable.
e. Received $750 of cash from clients for revenues accrued at the end of the prior month.
f. Received $400 of interest income accrued at the end of the prior month.
g. Received $825 of interest income for the current month.
h. Accrued $370 of interest income earned in the current month.
i. Paid $2,100 of interest expense at the end of the current month.
j. Accrued $740 of interest expense at the end of the current month.
k. Accrued $1600 of commission payable to sales staff for the current month.
The expert records transactions and adjustments.