Question: Refer to the previous problem In Problem Jan 8 Purchased on account

Refer to the previous problem.
In Problem
Jan. 8 Purchased on account merchandise for resale at a cost of $ 14,500, with terms 2/ 10, n/ 30. The company uses a periodic inventory system.
19 Paid the invoice received on January 8.
Mar. 10 Sold merchandise on credit for a total amount of $ 11,300, which included GST at 5 percent and PST at 8 percent of the sales amount.
Apr. 1 Borrowed $ 35,000 from the bank for general use; signed a 12- month, 6 percent interest-bearing note.
June 3 Purchased merchandise for resale at a cost of $ 16,420.
July 5 Paid the invoice received on June 3.
Aug. 1 Rented a small office in a building owned by the company and collected $ 6,000 for six months’ rent in advance. Ignore sales taxes. (Record the collection in a way that will not require an adjusting entry at year- end.)
Dec. 20 Received a $ 100 refundable deposit from a customer as a guarantee to return a large trailer “borrowed” for 30 days.
31 Determined that wages earned but not yet paid on December 31 amounted to $ 9,500. Ignore payroll taxes.
1. For each transaction (including adjusting and reclassification entries), indicate the accounts affected, amounts, and direction of the effects (1 for increases and 2 for decreases) on the accounting equation. Use the following headings:
2. For each transaction, state whether cash flow from operating activities is increased, decreased, or unchanged.

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  • CreatedAugust 04, 2015
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