Book 1 - Chapter 11

LG	11-2, continued
m.	Air conditioning repairs are required for $900. The bill will be paid later.

Assets	=

$97,560

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

(Notice that repair services are a resource consumed, so this is an expense. The decrease in cash will occur
later when the bill is paid.)

n. Sugar spends the $2,000 she withdrew for new furniture for her home.

Assets	=

$97,560

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

This is a personal transaction of the owner. It is not recorded by the business!

Learning Goal 11, continued

SOLUTIONS

S12

Section III · Transactions—Basic Recording Concepts

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