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LG	11-2,  continued
	j.   Cash of $590 is received from members who prepay next month’s dues.

Assets	=

$98,060

	Cash		Accounts Receivable		Prepaid Insurance		Gym Supplies		Gym Equipment
	Increase	Decrease	Increase	Decrease	Increase	Decrease	Increase	Decrease	Increase	Decrease
(Bal)	65,250		5,000		1,500		720		25,000
J	590
(New Bal.)	65,840		5,000		1,500		720		25,000

k.  Sugar withdraws $2,000 from the business for personal living expense.

Assets	=

$96,060

	Cash		Accounts Receivable		Prepaid Insurance		Gym Supplies		Gym Equipment
Increase	Increase	Decrease	Increase	Decrease	Increase	Decrease	Increase	Decrease	Increase	Decrease
(Bal)	65,840		5,000		1,500		720		25,000
K		2,000
(New Bal.)	63,840		5,000		1,500		720		25,000

l.  The business purchases $500 of supplies and $1,000 of equipment on credit.

Assets	=

$97,560

	Cash		Accounts Receivable		Prepaid Insurance		Gym Supplies		Gym Equipment
Increase	Increase	Decrease	Increase	Decrease	Increase	Decrease	Increase	Decrease	Increase	Decrease
(Bal)	63,840		5,000		1,500		720		25,000
L							500		1,000
(New Bal.)	63,840		5,000		1,500		1,220		26,000

Note: Neither the supplies nor the equipment have been used yet, so there is no expense. The assets   have been purchased, but not used up.

S10

Section III · Transactions—Basic Recording Concepts

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