Classify each of the following items as affecting assets or liabilities and revenues or expenses for Madsen Company. State which financial statement (balance sheet or income statement) each item would impact. Assume Madsen uses the accrual basis of determining income.
A. Madsen Company’s employees have worked 500 hours, earning $7,500, and have not been paid.
B. Madsen Company provided $20,000 of service to customers who promised to pay for the services next month.
C. Madsen Company used $1,000 of office supplies.