Wunderkind Photography entered into the following transactions during February 2020.Stockholders invested $5,000 in the business.Bought photography equipment for a cash payment of $1,000.Bought more photography equipment by signing a $500 note payable.Performed photography services for $400 cash.Performed photograph services, and billed the customer $900 on account.Collected $900 from the customer in item 5.Paid for February developing and printing, $150.Advertised the business in the Platteville Journal. The $100 cost will be billed to Wunderkind.Paid the advertising bill from item 8.Paid $200 for photography supplies.Received $300 cash advance payment from a customer for a photography job to be performed in April.Paid $250 dividend to the stockholders. Question 1:a.) Indicate whether each transaction increases or decreases assets, liabilities, or stockholders’ equity. As an example, item one would be: increase assets and increase stockholders’ equity.b.) Ignoring dollar amounts, explain what transactions 4 and 5 have in common, and how they differ.c.) Ignoring dollar amounts, explain what transactions 7 and 8 have in common, and how they differ.d.) Ignoring dollar amounts, explain what transactions 4 and 11 have in common, and how they differ.

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Answered: Wunderkind Photography entered into the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Wunderkind Photography entered into the following transactions during February 2020.

Stockholders invested $5,000 in the business.
Bought photography equipment for a cash payment of $1,000.
Bought more photography equipment by signing a $500 note payable.
Performed photography services for $400 cash.
Performed photograph services, and billed the customer $900 on account.
Collected $900 from the customer in item 5.
Paid for February developing and printing, $150.
Advertised the business in the Platteville Journal. The $100 cost will be billed to Wunderkind.
Paid the advertising bill from item 8.
Paid $200 for photography supplies.
Received $300 cash advance payment from a customer for a photography job to be performed in April.
Paid $250 dividend to the stockholders.

Question 1:

a.) Indicate whether each transaction increases or decreases assets, liabilities, or stockholders’ equity. As an example, item one would be: increase assets and increase stockholders’ equity.

b.) Ignoring dollar amounts, explain what transactions 4 and 5 have in common, and how they differ.

c.) Ignoring dollar amounts, explain what transactions 7 and 8 have in common, and how they differ.

d.) Ignoring dollar amounts, explain what transactions 4 and 11 have in common, and how they differ.

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