Ex. 257
There are ten transactions listed below. Match the transactions that have the identical effect on the accounting equation. You should end up with 5 matches.
a.Receive cash from customers on account.
b.Issue ordinary shares in exchange for cash.
c.Pay cash to reduce an accounts payable.
d.Purchase supplies for cash.
e.Pay cash to reduce a notes payable.
f.Purchase supplies on account.
g.Issue ordinary shares in exchange for noncash assets.
h.Purchase equipment with a note payable.
i.Pay utilities with cash.
j.Pay dividends.
Ex. 258
An analysis of the transactions made by K. T. Lang & Co., a law firm, for the month of July is shown below. Each increase and decrease in equity is explained.
Assets = Liab. + Equity
Retained Earnings
Accounts Accounts Share
Cash +Receivable + Supplies +Equipment = Payable +Cap + Rev. - Exp. - Div.
1. +€15,000+€15,000 Iss. Share
2. - 2,000+€5,000 +€3,000 Serv. Rev.
3. - 750 +€750
4. + 2,500+€6,600 + €9,100 Serv. Rev.
5. - 1,500- 1,500
6. - 2,500 - €2,500 Div.
7. - 650 - €650 Rent Exp.
8. + 550 - 550
9. - 3,500 - 3,500 Sal. Exp.
10. + 500 - 500 Util. Exp.
Instructions
(a)
Prepare an income statement for the month ending July 31, 2014.
(b)
Prepare a retained earnings statement for the month ending July 31, 2014.