Accounting Problem Set

Question 1

Determine what accounts are affected by what amounts and indicate whether it is an increase (+), decrease (-), or there is no effect (0) in each of the following cases.

Sept. 6 Invested $35,000 cash and $2,000 of supplies into the start-up of the business

Sept. 8 Received $21,000 cash for lawn care services provided to customers

Sept. 10 Purchased machinery on account for $18,500 from Sears Corporation

Sept. 12 Paid $3,750 for supplies bought

Sept. 15 Paid $17,500 for land acquired

Sept. 17 Paid $10,000 on account for the machinery previously purchased from Sears

Sept. 19 Paid telephone bill for $1,000

Sept. 21 Paid $1,500 for supplies

Sept. 21 Paid $3,500 for additional machinery

Sept. 22 Received $23,500 for services rendered

Sept. 26 Withdrew $10,000 cash for personal use

Sept. 30 The inventory of supplies showed a balance of $3,000 on hand

Instructions:

You are required to record the effect of each transaction in the table provided below.

Question 1 (Worksheet)

Record the effect of each transaction in the following table:

	Cash	Supplies	Equipment	Land	Accounts Payable	Capital
Sept. 6
Sept. 8
Sept. 10
Sept. 12
Sept. 15
Sept. 17
Sept. 19
Sept. 21
Sept. 21
Sept. 22
Sept. 26
Sept. 30

Question 2

You have been recently appointed as the accountant for Gone Clear Company. Prepare an income statement based on the following transactions:

Service Revenue $190,000

Supplies Expense $ 80,000

Salary & Wage $ 60,000

Administrative Expense $ 30,000

Miscellaneous Expense $ 5,000

Question 3

Based on Question 2 above (Gone Clear Company), what would the net income or net loss be if, in addition to the listed expenses, there was an additional $25,000 for office rent?