Answer to Question #245531 in Accounting for Magdalena

Question

During the month of August, Karlsson Industries had the following transactions:

Aug. 2 Paid cash for the August rent of $1,500

Aug. 6 Purchased supplies of $250 on account

Aug.10 Collected $5,700 from customers on account

Aug.15 Received $2,200 cash for services to be rendered in September

Aug. 21Paid for supplies purchased on account on August 6

Aug. 28 Billed customers for $7,500 for services provided in August

Aug. 31Paid $150 cash for utilities expense

For each transaction fill in the below table for the date of the transaction, the account name to be debited and credited and the effect on the respective account: increase to the account and for a decrease to the account

Choose the correct answer for each date

A. August 2nd

Debit account choose between: utility expenses, rent expenses, supplies, account receivable, accounts payable, cash, supplies expense, service revenue, Unearned revenue.

Effect :

Amount :

Credit account 

Effect

Amount

August 6th

August 10th

August 15th

August 21st

August 28th

August 31

Answer 1

Solution:

A.).  August 2nd:

Debit account = Rent expense account

Effect: = Decrease in rent expense.

Amount: = $1,500

Credit account = Cash account

Effect = Decrease in cash (Assets)

Amount = $1,500

B.). August 6th:

Debit account = Supplies expense account

Effect: = Increase in supplies.

Amount: = $250

Credit account = Accounts payable account

Effect = Increase in liabilities.

Amount = $250

 

C.). August 10th:

Debit account = Cash account

Effect: = Increase in assets.

Amount: = $5,700

Credit account = Accounts receivable account

Effect = Decrease in assets.

Amount = $5,700

 

D.). August 15th:

Debit account = Cash account

Effect: = Increase in assets.

Amount: = $2,200

Credit account = Unearned revenue account

Effect = Increase in liabilities.

Amount = $2,200

 

E.). August 21st:

Debit account = Accounts payable account

Effect: = Decrease in liabilities.

Amount: = $250

Credit account = Cash account

Effect = Decrease in assets.

Amount = $250

 

F.). August 28th:

Debit account = Accounts receivable account

Effect: = Increase in assets.

Amount: = $7,500

Credit account = Service revenue account

Effect = Increase in revenues.

Amount = $7,500

 

G.). August 31:

Debit account = Utility expense account

Effect: = Increase in utility expense.

Amount: = $150

Credit account = Cash account

Effect = Decrease in assets

Amount = $150