Chapter 3, Problem 3.7ME

Determining the Financial Statement Effects of Operating Activities Involving Revenues

The following transactions are July activities of Craig’s Bowling, Inc., which operates several bowling centers (for games and equipment sales). For each of the following transactions, complete the tabulation, indicating the amount and effect (+ for increase and − for decrease) of each transaction. (Remember that A = L + SE; R − E = NI; and NI affects SE through Retained Earnings.) Write NE if there is no effect. The first transaction is provided as an example.

	BALANCE SHEET			INCOME STATEMENT
Transaction	Assets	Liabilities	Stockholders’ Equity	Revenues	Expenses	Net Income
a. Craig’s collected $15,000 from customers for games played in July.	+15,000	NE	+15,000	+15,000	NE	+15,000
b. Craig’s sold bowling merchandise inventory from its pro shop for $8,000; received $3,000 in cash and customers owed the rest on accvount. (See M3-4[e] for the cost of goods sold |expense| related to these sales.)
c. Craig’s received $4,000 from customers who purchased merchandise in June on account.
d. The men’s and ladies’ bowling leagues gave Craig’s a deposit of $2,500 for the upcoming fall season.