Question

During February of this year, H. Davis established Davis Shoe Hospital. The following asset, liability, and owner's equity accounts are included in the chart of accounts: Cash Accounts Payable Shop Equipment H. Davis, Capital Store Equipment Income from Services Office Equipment Advertising Expense The following transactions occurred during the month of February: Davis deposited $34,000 cash in a bank account in the name of the business. Bought shop equipment for cash, $1,725, Ck. No. 1000. Bought advertising on account from Milland Company, $625. Bought store shelving on account from Inger Hardware, $925. Bought office equipment from Shara's Office Supply, $825, paying $345 in cash and placing the balance on account, Ck. No. 1001. Paid on account to Inger Hardware, $925, Ck. No. 1002. Davis invested his personal leather working tools with a fair market value of $910 in the business. Sold services for the month of February for cash, $460.

Required: Under each T account for the account classifications (Assets, Liabilities, Capital, Drawing, Revenue, Expense) in the fundamental accounting equation, select either a plus or minus sign on the left side to indicate whether a Debit increases or decreases the classification and select either a plus or minus sign on the right side to indicate whether a Credit increases or decreases the classification.

Answer 1

Cash A/c

		By Bank A/c	-34,000
To Income from services (for the month of february)	+460	By Office Equipment A/c(Shop Equipment Purchased)	-1,725
		By Office Equipment A/c (from Shara's Office Supply)	-345
		By Inger Hardware (Being payment made)	-925

Bank A/c

To Cash A/c

+34,000

Office Equipment A/c

To Cash A/c (Shop Equipment purchased)	+1,725
To Inger Hardware (Store Shelving)	+925
To Cash A/c (Office Equipment from Shara's Office Supply)	+345
To Shara's Office Supply(Office Equipment)	+480
To H. Davis Capital A/c(Leather Working Tool given by proprietor)	+910

Advertising Expenses A/c

To Cash A/c (Being expense paid)

+625

Milland Company A/c

By Advertising Expenses A/c

+625

Inger Hardware

By Office Equipment A/c(Office Equipment Store Shelving Purchased)

+925

Shara's Office Supply

To Cash A/c

-480

By Office Equipment A/c

+480

Income from Services

By Cash A/c (Income received for february)

+460

H. Davis Capital A/c

By Office Equipment A/c

+910

There is no information regarding capital introduction in cash by H. Davis so this is not included in the accounts prepared above.