You keep them in a rented garage and drive your own truck to parks and neighbourhood special events. You use your own cell phone to take reservations for private parties and events.. Your first summer month's transactions are listed below. May 1 May 2 May 3 May 4 May 5 May 6 May 7 May 8 May 10 May 15 May 27 You set up a bank account and acquire a business credit card. The bank will charge you a fee of $12 at the end of each month. May 31 You borrow $4,000 from the bank. You deposit $3,000 of your own money into the business bank account. May 31 You rent a garage for the next six months for $400 per month, paying the full amount now. May 11 You pay a student $60 cash to distribute half of your flyers. May 31 You register your business name for $60 with Service Ontario, using the business credit card. You gave a quotation to a prospecive block party organizer, to see if he liked it May 12 and would recommend you. You would normally have asked for a $100 deposit, but as you are just starting out, you didn't do that this time. May 31 You purchase, using your business credit card, supplies for $500 plus HST. You purchase, using your business credit card, two portable generators for $1,500 each from Softie Supply. HST is included. You buy a one-year liability insurance policy for $2,400, plus 8% tax, paying cash. You purchase for $200 cash, plus HST, 150 colour flyers to advertise your business. You haven't used any yet. May 28 You now have only $150 worth of supplies left. May 31 One month's rent on your garage has expired. Two more customers hire you to set up at their events. You will charge them each $500, and they each give you a deposit of $100. Business is blowing up! You have so far collected $2,000 in cash from happy party-goers. May 31 One month of your insurance policy has expired. The bank takes its monthly charge from your account, plus an additional $16 for interest on your loan. You received your cell phone bill for the month. Of the $80, three-quarters (i.e. 75%) was business calls. You will pay it next month. One of your May 15 customers held his event today. He will pay you his balance next week. The other customer's party is next weekend. You pay four-fifths (i.e. 80%) of the balance owing on your business credit card. You will pay the rest next month.
How will IFFA record the May 10 transaction?
a. increase Prepaid Advertising and decrease Cash, $226
b. increase both Prepaid Advertising and Accounts Payable, $226
c. increase Advertising Expense and decrease Cash, $226
d. increase both Prepaid Advertising and Accounts Payable, $200
e. increase Prepaid Advertising and decrease Cash, $200
Enter the letter that corresponds to your choice. (A B C D E)
How will IFFA record the May 11 transaction?]
a. increase Advertising Expense and decrease Prepaid Advertising by $226 each, and also decrease Cash and increase Wages Expense by $60 each
b. increase Advertising Expense and decrease Prepaid Advertising by $113 each, and also increase Cash and decrease Wages Expense by $60 each
c. increase Advertising Expense and decrease Prepaid Advertising by $113 each, and also decrease Cash and increase Wages Expense by $60 each
d. increase Advertising Expense and decrease Prepaid Advertising by $226 each, and also increase Cash and decrease Wages Expense by $60 each
e. decrease Advertising Expense and increase Prepaid Advertising by $193 each, and also increase Cash and decrease Wages Expense by $60 each
f. increase Advertising Expense and decrease Prepaid Advertising by $226 each, and also decrease Cash and increase Wages Expense by $60 each
Enter the letter that corresponds to your choice. (A B C D E F)
How will IFFA record the May 12 transaction?
a. increase both Cash and Service Revenue, $100
b. increase both Cash and Deferred Revenue, $100
c. increase both
d. increase both Accounts Receivable and Deferred Revenue, $100
e. No entry is needed.
Enter the letter that corresponds to your choice. (A B C D E)
How will IFFA record the May 15 transaction?
a. increase both Cash and Service Revenue, $200
b. increase both Cash and Deferred Revenue, $200
c. increase both Cash and Service Revenue, $1,000
d. increase both Accounts Receivable and Service Revenue, $200
e. increase both Accounts Receivable and Deferred Revenue, $200
f. no entry is needed until you provide the services.
Enter the letter that corresponds to your choice. (A B C D E F)
How will IFFA record the May 27 transaction?
a. increase both Accounts Receivable and Service Revenue, $2,000
b. increase both Accounts Receivable and Deferred Revenue, $2,000
c. increase both Cash and Service Revenue, $2,000
d. increase both Cash and Deferred Revenue, $2,000
e. No entry is needed.
Enter the letter that corresponds to your choice. (A B C D E)
How will IFFA record the May 28 transaction?
a. increase Supplies and decrease Supplies Expense, $415
b. increase Supplies and decrease Supplies Expense, $150
c. increase Supplies Expense and decrease Supplies, $150
d. increase Supplies Expense and decrease Supplies, $415
e. increase Supplies Expense and decrease Supplies, $565
f. increase Supplies and decrease Supplies Expense, $565
Enter the letter that corresponds to your choice. (A B C D E F)
How will IFFA record the May 31 rent expiry?
a. increase Cash and decrease Rent Expense, $400
b. increase both Accounts Payable and Rent Expense, $400
c. decrease Prepaid Rent and increase Rent Expense, $400
d. decrease Prepaid Rent and increase Rent Expense, $2,400
e. decrease Cash $400 and increase Rent Expense $400
Enter the letter that corresponds to your choice. (A B C D E)
How will IFFA record the May 31 cell phone transaction?
a. decrease Cash $60, increase Accounts Payable $20, and increase Phone Expense $80
b. increase both Accounts Payable and Phone Expense, $60
c. decrease Cash and increase Phone Expense, $60
d. increase both Accounts Payable and Phone Expense, $20
e. decrease Cash and increase Phone Expense, $20
Enter the letter that corresponds to your choice. (A B C D E)
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