Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows. Issued stock to investors for $15,800 in cash. Purchased used car for $10,300 cash for use in business. Purchased supplies on account for $320. Billed customers $5,430 for services performed. Paid $200 cash for advertising start of the business. Received $1,870 cash from customers billed in transaction (4). Paid creditor $190 cash on account. Paid dividends of $300 cash to stockholders. 1. 2. 3. 4. 5. 6. 7. 8. (a) For each transaction indicate the basic type of account debited and credited (asset, liability, stockholders' equity); the specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.); whether the specific account is increased or decreased; and the normal balance of the specific account. Account Debited Account Credited No. Basic Type Basic Type Specific Account Effect Normal Balance Specific Account Effect Normal Balance Stockholders' Equity Debit Credit 1. Asset Cash Increase Common Stock Increase 2. 4. 5. 6. 7. 8. 3. 5.
Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows. Issued stock to investors for $15,800 in cash. Purchased used car for $10,300 cash for use in business. Purchased supplies on account for $320. Billed customers $5,430 for services performed. Paid $200 cash for advertising start of the business. Received $1,870 cash from customers billed in transaction (4). Paid creditor $190 cash on account. Paid dividends of $300 cash to stockholders. 1. 2. 3. 4. 5. 6. 7. 8. (a) For each transaction indicate the basic type of account debited and credited (asset, liability, stockholders' equity); the specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.); whether the specific account is increased or decreased; and the normal balance of the specific account. Account Debited Account Credited No. Basic Type Basic Type Specific Account Effect Normal Balance Specific Account Effect Normal Balance Stockholders' Equity Debit Credit 1. Asset Cash Increase Common Stock Increase 2. 4. 5. 6. 7. 8. 3. 5.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows.
Issued stock to investors for $15,800 in cash.
Purchased used car for $10,300 cash for use in business.
Purchased supplies on account for $320.
Billed customers $5,430 for services performed.
Paid $200 cash for advertising start of the business.
Received $1,870 cash from customers billed in transaction (4).
Paid creditor $190 cash on account.
Paid dividends of $300 cash to stockholders.
1.
2.
3.
4.
5.
6.
7.
8.
(a)
For each transaction indicate the basic type of account debited and credited (asset, liability, stockholders' equity); the specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.); whether the specific account is
increased or decreased; and the normal balance of the specific account.
Account Debited
Account Credited
No.
Basic Type
Basic Type
Specific Account
Effect
Normal Balance
Specific Account
Effect
Normal Balance
Stockholders' Equity
Debit
Credit
1.
Asset
Cash
Increase
Common Stock
Increase
2.
4.
5.
6.
7.
8.
3.
5.
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