Question

The following transactions occur for the Wolfpack Shoe Company during the month of June:
a. Provide services to customers for $30,000 and receive cash.
b. Purchase office supplies on account for $20,000.
c. Pay $7,000 in salaries to employees for work performed during the month.
Required:
1. Analyze each transaction. For each transaction, indicate by how much each category in the acounting equation increases or decreases
Assets = Liabilities + Stockholder's equity
2. Record the transactions. The company uses the following accounts:
Cash, Supplies, Accounts payable, Salaries expense, and Service Revenue.

Answer 1

Answer:

Please see the attached snapshots for the answers.

Explanation:

a.

Debit: Cash $30,000

Credit: Service Revenue $30,000

To record Service Revenue.

b.

Debit: Supplies $20,000

Credit: Accounts Payable $20,000

To record purchase of supplies on account.

c.

Debit: Salaries Expense $7,000

Credit: Cash $7,000

To record salaries Expense.