A list of transactions follows.

1. Purchased inventory (perpetual system) on account.

2. Extended payment terms of the account payable in item 1 by issuing a nine-month, 5% note payable.

3. Recorded accrued interest on the note payable from item 2.

4. Recorded repayment of the note and accrued interest from items 2 and 3.

5. Recorded cash received from sale of services, plus HST.

6. Recorded salaries expense, employee payroll deductions, and paid employees.

7. Recorded employer's share of employee benefits.

8. Recorded property tax expense and property tax payable when bill was received.

9. Recorded a receipt of cash for services that will be performed in the future.

10. Recorded the performance of services for item 9.

Instructions

Set up a table using the format that follows. Indicate the effect of each of the above transactions on the financial statement categories in the table: use "1" for increase, "2" for decrease, and "NE" for no effect. The first one has been done for you as an example.

Transcribed Image Text:

Assets Liabilities Shareholders' Equity Revenues ExpensesProfit 1. NE NE NE NE