84. Li Chan is a friend of yours from university. She recently decided to open her own computer consulting business and has contracted her services to a number of local retailers. She is paid a...

84. Li Chan is a friend of yours from university. She recently decided to open her own computer consulting business and has contracted her services to a number of local retailers. She is paid a monthly fee for her services. Li has just received her first set of financial statements from her accountant and is quite upset. The statements show a cash balance of $3,600, but net earnings of only $500. She has written you a letter asking you whether such a situation is possible, or whether she should find another accountant.


Required:


Write a short letter to your friend and answer her completely, but briefly. Use proper form.

85. For each of the following transactions indicate whether the account identified would be debited or credited as a result of the transaction.


Example: Inventory purchased on credit. Inventory? Debit


A) Sales made for cash. Cash?
B) Rent paid for the month. Rent expense?
C) Shareholder purchases shares. Capital stock?
D) Account payable paid off. Account payable?
E) Sales made on credit. Sales?
F) Dividends paid. Dividends?
G) Borrowed money from bank. Bank loan?