Phelps Company entered into the following transactions during Year 1:
1)Provided services to customers for cash, $70,0002)Purchased land by paying cash, $32,0003)Paid rent in advance for 6 months, $24,0004)Acquired cash of $50,000 by issuing common stock5)Purchased supplies on account, $5,4006)Receive payment of $6,000 from a customer for services that will be provided over the next six months.
Required:a)Prepare journal entries for each of the preceding transactions.
b)Show how each transaction affects the financial statements by inserting the related dollar amounts. Precede each amount with a plus sign ("+")if the transaction increases, a minus sign ("−")if the transaction decreases, or "NA" if the transaction does not affect a given element of the financial statements.In the last column, use the letters "OA" for operating activities, "IA" for investing activities, and "FA" for financing activities, or "NA" if the statement of cash flows is not affected.

Question

Phelps Company entered into the following transactions during Year 1:
1)Provided services to customers for cash, $70,0002)Purchased land by paying cash, $32,0003)Paid rent in advance for 6 months, $24,0004)Acquired cash of $50,000 by issuing common stock5)Purchased supplies on account, $5,4006)Receive payment of $6,000 from a customer for services that will be provided over the next six months.
Required:a)Prepare journal entries for each of the preceding transactions.
  b)Show how each transaction affects the financial statements by inserting the related dollar amounts. Precede each amount with a plus sign ("+")if the transaction increases, a minus sign ("−")if the transaction decreases, or "NA" if the transaction does not affect a given element of the financial statements.In the last column, use the letters "OA" for operating activities, "IA" for investing activities, and "FA" for financing activities, or "NA" if the statement of cash flows is not affected.

Quizplus · Accepted Answer

The Answer of Phelps Company entered into the following transactions during Year 1:
1)Provided services to customers for cash, $70,0002)Purchased land by paying cash, $32,0003)Paid rent in advance for 6 months, $24,0004)Acquired cash of $50,000 by issuing common stock5)Purchased supplies on account, $5,4006)Receive payment of $6,000 from a customer for services that will be provided over the next six months.
Required:a)Prepare journal entries for each of the preceding transactions.
  b)Show how each transaction affects the financial statements by inserting the related dollar amounts. Precede each amount with a plus sign ("+")if the transaction increases, a minus sign ("−")if the transaction decreases, or "NA" if the transaction does not affect a given element of the financial statements.In the last column, use the letters "OA" for operating activities, "IA" for investing activities, and "FA" for financing activities, or "NA" if the statement of cash flows is not affected.

Phelps Company Entered into the Following Transactions During Year 1