On September 1 of the current year, Joy Tucker established a business to manage rental property, She completed the following transactions during September.

a. Opened a business bank account with a deposit of $49,000 in exchange for common stock.

b. Purchased office supplies on account, $3,010.

c. Received cash from fees earned for managing rental property, $8,240.

d. Paid rent on office and equipment for the month, $3,690.

e. Paid creditors on account, $1,370. Billed customers for fees earned for managing rental property, $6,840.

g. Paid automobile expenses for month, $820, and miscellaneous expenses, $410.

h. Paid office salaries, $2,600

l. Determined that the cost of supplies on hand was $1,780; therefore, the cost of supplies used was $1,230. Paid dividends $2,460.

Required:

1. Indicate the effect of each transaction and the balances after each transaction.

a. Assets : Increase $49,000, Equity : Increase $49,000, Liabilities : No Effect

b. Assets : Increase $3,010, Equity : No Effect, Liabilities : Increase $3,010

c. Assets : Increase $8,240, Equity : Increase $8,240, Liabilities : No Effect

d. Assets : decrease $3,690, Equity : decrease $3,690, Liabilities : No Effect

e. Assets : decrease $1,370, Equity : No Effect, Liabilities : decrease $1,370

f. Assets : Increase $6,840, Equity : Increase $6,840, Liabilities : No Effect

g. Assets : decrease $1,230, Equity : decrease $1,230, Liabilities : No Effect

h. Assets : decrease $2,600, Equity : decrease $2,600, Liabilities : No Effect

i. Assets : decrease $2,460, Equity : decrease $2,460, Liabilities : No Effect

Explanation:

For Each Transaction First Identify the Two Accounts Affected and Then classify in one of the Categories of Assets, Liabilities and Equity. Finally determine the effect (decrease/increase/no effect in the category items are placed.