Wunderkind Photography entered into the following transactions during February 2020. Stockholders invested $5,000 in the business. Bought photography equipment for a cash payment of $1,000. Bought more photography equipment by signing a $500 note payable. Performed photography services for $400 cash. Performed photograph services, and billed the customer $900 on account. Collected $900 from the customer in item 5. Paid for February developing and printing, $150. Advertised the business in the Platteville Journal. The $100 cost will be billed to Wunderkind. Paid the advertising bill from item 8. Paid $200 for photography supplies. Received $300 cash advance payment from a customer for a photography job to be performed in April. Paid $250 dividend to the stockholders. Question 1: a.) Indicate whether each transaction increases or decreases assets, liabilities, or stockholders’ equity. As an example, item one would be: increase assets and increase stockholders’ equity. b.) Ignoring dollar amounts, explain what transactions 4 and 5 have in common, and how they differ. c.) Ignoring dollar amounts, explain what transactions 7 and 8 have in common, and how they differ.
Wunderkind Photography entered into the following transactions during February 2020. Stockholders invested $5,000 in the business. Bought photography equipment for a cash payment of $1,000. Bought more photography equipment by signing a $500 note payable. Performed photography services for $400 cash. Performed photograph services, and billed the customer $900 on account. Collected $900 from the customer in item 5. Paid for February developing and printing, $150. Advertised the business in the Platteville Journal. The $100 cost will be billed to Wunderkind. Paid the advertising bill from item 8. Paid $200 for photography supplies. Received $300 cash advance payment from a customer for a photography job to be performed in April. Paid $250 dividend to the stockholders. Question 1: a.) Indicate whether each transaction increases or decreases assets, liabilities, or stockholders’ equity. As an example, item one would be: increase assets and increase stockholders’ equity. b.) Ignoring dollar amounts, explain what transactions 4 and 5 have in common, and how they differ. c.) Ignoring dollar amounts, explain what transactions 7 and 8 have in common, and how they differ.
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 5PA: Review the following transactions, and prepare any necessary journal entries. A. On July 16, Arrow...
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Question
Wunderkind Photography entered into the following transactions during February 2020.
- Stockholders invested $5,000 in the business.
- Bought photography equipment for a cash payment of $1,000.
- Bought more photography equipment by signing a $500 note payable.
- Performed photography services for $400 cash.
- Performed photograph services, and billed the customer $900 on account.
- Collected $900 from the customer in item 5.
- Paid for February developing and printing, $150.
- Advertised the business in the Platteville Journal. The $100 cost will be billed to Wunderkind.
- Paid the advertising bill from item 8.
- Paid $200 for photography supplies.
- Received $300 cash advance payment from a customer for a photography job to be performed in April.
- Paid $250 dividend to the stockholders.
Question 1:
a.) Indicate whether each transaction increases or decreases assets, liabilities, or
b.) Ignoring dollar amounts, explain what transactions 4 and 5 have in common, and how they differ.
c.) Ignoring dollar amounts, explain what transactions 7 and 8 have in common, and how they differ.
d.) Ignoring dollar amounts, explain what transactions 4 and 11 have in common, and how they differ.
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