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SERIES B EXERCISE CLASSIFYING BUSINESS TRANSACTIONS Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. Classify each transaction as an operating, an investing, or a financing activity. (a) Invested cash in the business, $5,000. (b) Purchased office equipment. Paid $2,500 cash and agreed to pay the balance of $2,000 in four monthly installments. (c) Paid office rent, $400. (d) Received cash for services rendered, $700. (e) Paid phone bill, $95. (f) Received cash for services rendered, $600. (g) Made payment on loan in transaction (b), $500. (h) Paid wages to pan-time employee, $800. (i) Paid electricity bill, $100. (j) Withdrew cash for personal use, $500. (k) Paid wages to pan-time employee, $600.

BuyFind

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756
BuyFind

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

Solutions

Chapter
Section
Chapter 6A, Problem 1SEB
Textbook Problem

SERIES B EXERCISE

CLASSIFYING BUSINESS TRANSACTIONS Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. Classify each transaction as an operating, an investing, or a financing activity.

(a) Invested cash in the business, $5,000.

(b) Purchased office equipment. Paid $2,500 cash and agreed to pay the balance of $2,000 in four monthly installments.

(c) Paid office rent, $400.

(d) Received cash for services rendered, $700.

(e) Paid phone bill, $95.

(f) Received cash for services rendered, $600.

(g) Made payment on loan in transaction (b), $500.

(h) Paid wages to pan-time employee, $800.

(i) Paid electricity bill, $100.

(j) Withdrew cash for personal use, $500.

(k) Paid wages to pan-time employee, $600.

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