For each account, indicate (a) whether the normal balance is a debit or inancial statement-balance sheet or income statement-where the account should be presented. E3-7 Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows. its, credits, and ences and journalize 1. Issued stock to investors for $15,000 in cash. 2. Purchased used car for $10,000 cash for use in business. 3. Purchased supplies on account for $300. 4. Billed customers $3,700 for services performed. 5. Paid $200 cash for advertising at the start of the business. 6. Received $1,100 cash from customers billed in transaction (4). 7. Paid creditor $300 cash on account. 8. Paid dividends of $400 cash to stockholders. Instructions (a) 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, Service Revenue, 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. Account Credited Account Debited (d) Norma (b) (c) (d) Normal Basic Specific Balance Type (a) (c) (b) (a) Trans- Basic Specific action Type Account Effect Effect Balanc Account Credi: Debit Stock- Common Increase Cash Increase Asset holders' Stock equity (b) Journalize the transactions. Do not provide explanations.
For each account, indicate (a) whether the normal balance is a debit or inancial statement-balance sheet or income statement-where the account should be presented. E3-7 Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows. its, credits, and ences and journalize 1. Issued stock to investors for $15,000 in cash. 2. Purchased used car for $10,000 cash for use in business. 3. Purchased supplies on account for $300. 4. Billed customers $3,700 for services performed. 5. Paid $200 cash for advertising at the start of the business. 6. Received $1,100 cash from customers billed in transaction (4). 7. Paid creditor $300 cash on account. 8. Paid dividends of $400 cash to stockholders. Instructions (a) 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, Service Revenue, 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. Account Credited Account Debited (d) Norma (b) (c) (d) Normal Basic Specific Balance Type (a) (c) (b) (a) Trans- Basic Specific action Type Account Effect Effect Balanc Account Credi: Debit Stock- Common Increase Cash Increase Asset holders' Stock equity (b) Journalize the transactions. Do not provide explanations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
TY
Transcribed Image Text:For each account, indicate (a) whether the normal balance is a debit or
inancial statement-balance sheet or income statement-where the account should be
presented.
E3-7 Selected transactions for Front Room, an interior decorator corporation, in its first
month of business, are as follows.
its, credits, and
ences and journalize
1. Issued stock to investors for $15,000 in cash.
2. Purchased used car for $10,000 cash for use in business.
3. Purchased supplies on account for $300.
4. Billed customers $3,700 for services performed.
5. Paid $200 cash for advertising at the start of the business.
6. Received $1,100 cash from customers billed in transaction (4).
7. Paid creditor $300 cash on account.
8. Paid dividends of $400 cash to stockholders.
Instructions
(a) 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, Service Revenue, 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.
Account Credited
Account Debited
(d)
Norma
(b)
(c)
(d)
Normal Basic Specific
Balance Type
(a)
(c)
(b)
(a)
Trans- Basic Specific
action Type Account Effect
Effect
Balanc
Account
Credi:
Debit
Stock- Common Increase
Cash
Increase
Asset
holders'
Stock
equity
(b) Journalize the transactions. Do not provide explanations.
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