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CHAPTER 1 - CHAPTER 1 SOLUTIONS TO EXERCISES EXERCISE 1-1...

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Unformatted text preview: CHAPTER 1 SOLUTIONS TO EXERCISES EXERCISE 1-1 Asset Liability Owner’s Equity Cash Accounts payable Karin Robinson, Capital Cleaning equipment Notes payable Cleaning supplies Salaries payable Accounts receivable EXERCISE 1-2 1. Increase in assets and increase in owner’s equity. 2. Decrease in assets and decrease in owner’s equity. 3. Increase in assets and increase in liabilities. 4. Increase in assets and increase in owner’s equity. 5. Decrease in assets and decrease in owner’s equity. 6. Increase in assets and decrease in assets. 7. Increase in liabilities and decrease in owner’s equity. 8. Increase in assets and decrease in assets. 9. Increase in assets and increase in owner’s equity. EXERCISE 1-3 1. (c) 5. (d) 2. (d) 6. (b) 3. (a) 7. (e) 4. (b) 8. (f) EXERCISE 1-4 (a) 1. Owner invested $15,000 cash in the business. 2. Purchased office equipment for $5,000, paying $2,000 in cash and the balance of $3,000 on account. 3. Paid $750 cash for supplies. 4. Earned $6,300 in revenue, receiving $2,600 cash and $3,700 on account. 5. Paid $1,500 cash on accounts payable. EXERCISE 1-4 (Continued) 6. Owner withdrew $2,000 cash for personal use. 7. Paid $650 cash for rent. 8. Collected $450 cash from customers on account. 9. Paid salaries of $3,900. 10. Incurred $500 of utilities expense on account. (b) Investment.................................................................................. $15,000........................................................................................ Service revenue......................................................................... 6,300............................................................................................ Drawings.................................................................................... (2,000......................................................................................... ) Rent expense............................................................................. (650............................................................................................ ) Salaries expense....................................................................... (3,900......................................................................................... ) Utilities expense........................................................................ (500 ) Increase in capital..................................................................... $14,250 ........................................................................................ (c) Service revenue......................................................................... $6,300.............................................................................................
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CHAPTER 1 - CHAPTER 1 SOLUTIONS TO EXERCISES EXERCISE 1-1...

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