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Daniels Company is owned and operated by Thomas Daniels. The following selected transactions were completed by Daniels Company during May: 1. Received cash from owner as additional investment, $55,000. 2. Paid creditors on account, $7,000. 3. Billed customers for services on account, $2,565 4. Received cash from customers on account, $8,450. 5. Paid cash to owner for personal use, $2,500 6. Received the utility bill, $160, to be paid next month. Indicate the effect of each transaction on the accounting equation by: 1. Accounting equation element type: (A) assets, (L) liabilities, (OE) owner's equity, (R) revenue, and (E) expense 2. Name of accounting equation element. 3. The amount of the transaction. 4. Indicate the direction of change in the account that is affected. Note: Each transaction has two entries. Enter all amounts as positive numbers. Entry Entry Accounting Accounting Name of Name of Equation Increase or Equation Increase or Accounting Accounting Element Type Element Type Amount Decrease Amount Decrease Equation Element Equation Element (1) (3) (4) (1) (3) (4) (2) (2) Simpson Auto Body Repair purchased $19,202 of Machinery. The company paid $3,819 in cash at the time of the purchase and the remainder was purchased on account to be paid in four monthly installments. a. How will the purchase affect the accounting equation? liabilities by $ total assets by a net amount of $ and b. How will the payment of the first monthly installment affect the accounting equation (ignore interest)? assets by $ liabilities by $ and

Daniels Company is owned and operated by Thomas Daniels. The following selected transactions were completed by Daniels Company during May: 1. Received cash from owner as additional investment, $55,000. 2. Paid creditors on account, $7,000. 3. Billed customers for services on account, $2,565 4. Received cash from customers on account, $8,450. 5. Paid cash to owner for personal use, $2,500 6. Received the utility bill, $160, to be paid next month. Indicate the effect of each transaction on the accounting equation by: 1. Accounting equation element type: (A) assets, (L) liabilities, (OE) owner's equity, (R) revenue, and (E) expense 2. Name of accounting equation element. 3. The amount of the transaction. 4. Indicate the direction of change in the account that is affected. Note: Each transaction has two entries. Enter all amounts as positive numbers. Entry Entry Accounting Accounting Name of Name of Equation Increase or Equation Increase or Accounting Accounting Element Type Element Type Amount Decrease Amount Decrease Equation Element Equation Element (1) (3) (4) (1) (3) (4) (2) (2) Simpson Auto Body Repair purchased $19,202 of Machinery. The company paid $3,819 in cash at the time of the purchase and the remainder was purchased on account to be paid in four monthly installments. a. How will the purchase affect the accounting equation? liabilities by $ total assets by a net amount of $ and b. How will the payment of the first monthly installment affect the accounting equation (ignore interest)? assets by $ liabilities by $ and

FINANCIAL ACCOUNTING
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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Daniels Company is owned and operated by Thomas Daniels. The following selected transactions were completed by Daniels Company during May: 1. Received cash from owner as additional investment, $55,000. 2. Paid creditors on account, $7,000. 3. Billed customers for services on account, $2,565 4. Received cash from customers on account, $8,450. 5. Paid cash to owner for personal use, $2,500 6. Received the utility bill, $160, to be paid next month. Indicate the effect of each transaction on the accounting equation by: 1. Accounting equation element type: (A) assets, (L) liabilities, (OE) owner's equity, (R) revenue, and (E) expense 2. Name of accounting equation element. 3. The amount of the transaction. 4. Indicate the direction of change in the account that is affected. Note: Each transaction has two entries. Enter all amounts as positive numbers. Entry Entry Accounting Accounting Name of Name of Equation Increase or Equation Increase or Accounting Accounting Element Type Element Type Amount Decrease Amount Decrease Equation Element Equation Element (1) (3) (4) (1) (3) (4) (2) (2)
Transcribed Image Text:Daniels Company is owned and operated by Thomas Daniels. The following selected transactions were completed by Daniels Company during May: 1. Received cash from owner as additional investment, $55,000. 2. Paid creditors on account, $7,000. 3. Billed customers for services on account, $2,565 4. Received cash from customers on account, $8,450. 5. Paid cash to owner for personal use, $2,500 6. Received the utility bill, $160, to be paid next month. Indicate the effect of each transaction on the accounting equation by: 1. Accounting equation element type: (A) assets, (L) liabilities, (OE) owner's equity, (R) revenue, and (E) expense 2. Name of accounting equation element. 3. The amount of the transaction. 4. Indicate the direction of change in the account that is affected. Note: Each transaction has two entries. Enter all amounts as positive numbers. Entry Entry Accounting Accounting Name of Name of Equation Increase or Equation Increase or Accounting Accounting Element Type Element Type Amount Decrease Amount Decrease Equation Element Equation Element (1) (3) (4) (1) (3) (4) (2) (2)
Simpson Auto Body Repair purchased $19,202 of Machinery. The company paid $3,819 in cash at the time of the purchase and the remainder was purchased on account to be paid in four monthly installments. a. How will the purchase affect the accounting equation? liabilities by $ total assets by a net amount of $ and b. How will the payment of the first monthly installment affect the accounting equation (ignore interest)? assets by $ liabilities by $ and
Transcribed Image Text:Simpson Auto Body Repair purchased $19,202 of Machinery. The company paid $3,819 in cash at the time of the purchase and the remainder was purchased on account to be paid in four monthly installments. a. How will the purchase affect the accounting equation? liabilities by $ total assets by a net amount of $ and b. How will the payment of the first monthly installment affect the accounting equation (ignore interest)? assets by $ liabilities by $ and
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