Keystone Computer Timeshare Company entered into the following transactions during May 2022.
1. Purchased computers for $20,000 from Data Equipment on account.
2. Paid $3,000 cash for May rent on storage space.
3. Received $15,000 cash from customers for contracts billed in April.
4. Performed computer services for Ryan Construction Company for $2,700 cash.
5. Paid Midland Power Co. $11,000 cash for energy usage in May.
6. Stockholders invested an additional $32,000 in the business.
7. Paid Data Equipment for the computers purchased in (1) above.
8. Incurred advertising expense for May of $840 on account.
Instructions
Indicate with the appropriate letter whether each of the above transactions results in:
a. An increase in assets and a decrease in assets.
b. An increase in assets and an increase in stockholders’ equity.
c. An increase in assets and an increase in liabilities.
d. A decrease in assets and a decrease in stockholders’ equity.
e. A decrease in assets and a decrease in liabilities.
f. An increase in liabilities and a decrease in stockholders’ equity.
g. An increase in stockholders’ equity and a decrease in liabilities.
Analyze the effect of transactions.
