Identify debits, credits, and normal balances. E2-2 Selected transactions for B. Madar SE, an interior decorating firm, in its first month of business, are shown below. (LO 2) Jan. 2 Invested €15,000 cash in the business in exchange for ordinary shares. 3 Purchased used car for €7,000 cash for use in the business. Purchased supplies on account for €500. €1,800 of services were performed and billed. 16 Paid €200 cash for advertising. 20 Received €700 cash from customers billed on January 11. 23 11 Paid creditor €300 cash on balance owed. 28 Declared and paid a €1,000 cash dividend. Instructions For each transaction indicate the following. (a) The basic type of account debited and credited (asset, liability, equity). (b) The specific account debited and credited (cash, rent expense, service revenue, etc.). (c) Whether the specific account is increased or decreased. (d) The normal balance of the specific account. Use the following format, in which the January 2 transaction is given as an example. Account Debited Account Credited (b) Basic Specific Туре Ассоunt (a) (c) (d) Normal Balance (b) Basic Specific Туре (а) (c) (d) Normal Balance Date Effect Account Effect Jan. 2 Asset Cash Increase Debit Equity Share Increase Credit Capital E2-3 Data for B. Madar SE, interior decorating, are presented in E2-2. Journalize transactions. (LO 4) Instructions Journalize the transactions using journal page J1. (You may omit explanations.)
Identify debits, credits, and normal balances. E2-2 Selected transactions for B. Madar SE, an interior decorating firm, in its first month of business, are shown below. (LO 2) Jan. 2 Invested €15,000 cash in the business in exchange for ordinary shares. 3 Purchased used car for €7,000 cash for use in the business. Purchased supplies on account for €500. €1,800 of services were performed and billed. 16 Paid €200 cash for advertising. 20 Received €700 cash from customers billed on January 11. 23 11 Paid creditor €300 cash on balance owed. 28 Declared and paid a €1,000 cash dividend. Instructions For each transaction indicate the following. (a) The basic type of account debited and credited (asset, liability, equity). (b) The specific account debited and credited (cash, rent expense, service revenue, etc.). (c) Whether the specific account is increased or decreased. (d) The normal balance of the specific account. Use the following format, in which the January 2 transaction is given as an example. Account Debited Account Credited (b) Basic Specific Туре Ассоunt (a) (c) (d) Normal Balance (b) Basic Specific Туре (а) (c) (d) Normal Balance Date Effect Account Effect Jan. 2 Asset Cash Increase Debit Equity Share Increase Credit Capital E2-3 Data for B. Madar SE, interior decorating, are presented in E2-2. Journalize transactions. (LO 4) Instructions Journalize the transactions using journal page J1. (You may omit explanations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Identify debits, credits,
and normal balances,
E2-2 Selected transactions for B. Madar SE, an interior decorating firm, in its first month
of business, are shown below.
(LO 2)
Jan, 2
Invested €15,000 cash in the business in exchange for ordinary shares.
3
Purchased used car for €7,000 cash for use in the business.
Purchased supplies on account for €500.
€1,800 of services were performed and billed.
Paid €200 cash for advertising.
Received €700 cash from customers billed on January 11.
23
9
11
16
20
Paid creditor €300 cash on balance owed.
Declared and paid a €1,000 cash dividend.
28
Instructions
For each transaction indicate the following.
(a) The basic type of account debited and credited (asset, liability, equity).
(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).
(c) Whether the specific account is increased or decreased.
(d) The normal balance of the specific account.
Use the following format, in which the January 2 transaction is given as an example.
Account Debited
Account Credited
(b)
Basic Specific
Туре
(a)
(c)
(d)
Normal
Balance
(а)
Basic Specific
Туре
Equity
(b)
(c)
(d)
Normal
Balance
Date
Account
Effect
Account
Effect
Jan. 2 Asset
Cash
Increase
Debit
Share
Increase
Credit
Capital
E2-3 Data for B. Madar SE, interior decorating, are presented in E2-2.
Journalize transactions,
(LO 4)
Instructions
Journalize the transactions using journal page J1. (You may omit explanations.)
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