Question

Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example. (If an amount reduces the account balance then enter with negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000).

Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example. (If an amount reduces the account balance then enter with negative sign preceding the number e.g 15,000 or parentheses e.g. (15,000). Cash $-133 Net Income $0
(a) Purchased $133 of supplies for cash.
(b) Recorded an adjusting entry to record use of $31 of the above supplies.
(c) Made sales of $1,297, all on account.
(d) Received $865 from customers in payment of their accounts.
(e) Purchased equipment for cash, $2,528 ()
Recorded depreciation of building for period used, $610. 0 1297 1164 865 299 2528 2229 610 2839

Answer 1

Kindly see attached organized table for clarity.

Item cash Net income

a Purchase of Supplies of cash -$133 -

b Adjusting entry for use of supplies - -$31

c Made sales on account - $1,297

d Received cash from customer on acct $865 -

e Purchased equipment for cash -$2,528 -

f Depreciation of building to be recorded - -$610