Question

Three former college classmates decided to open a store near campus to sell wireless equipment to students. They created a public company, The Wire, and issued stock to interested investors. They plan on creating monthly financial statements. Required: Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts for The Wire that are affected, whether they increase or decrease, and the amount of the increase or decrease. YOU MUST FOLLOW THE INSTRUCTIONS BELOW. IF YOU DON'T, YOU MAY KNOW THE CORRECT ENTRY BUT THE COMPUTER WILL NOT RECOGNIZE IT AND WILL NOT GIVE YOU CREDIT. 1. After each transaction description, there are several "Account" submission boxes and corresponding "Amount" submission boxes. To indicate the accounts that you think are affected, choose them from the drop-down menu. But you MUST select them in the order that they are listed in the menu. FOR EXAMPLE, if you think that Cash and Inventory are affected by a particular transaction, you must record the effect on the Cash account first and the effect on the Inventory account second, since that is the order in which they are listed in the drop-down menu. If you record the Inventory effect first and the Cash effect second, even if they are the correct accounts with the correct dollar amounts, your answer will be considered wrong. 2. When you record the dollar amounts, be sure to use a minus sign to indicate a decrease in the account. You don't need to use a plus sign to indicate an increase. Also, don't use a dollar sign or spaces. 3. There are always more "Account" and "Amount" submission boxes available than are necessary. When you have indicated all the accounts that are affected by the transaction, select "Leave Blank" from the drop-down menu for EACH of the remaining "Account" submission boxes (you can leave the "Amount" boxes blank). 4. For transactions 3, 4, 5, and 8, you are given additional instructions. Read them carefully. 5. You get 5 tries for each complete entry. 6. The entries for transaction #8 is worth 4 points. The entries for each of the other transactions are worth 2 points.

Answer 1

1	Account:	Cash	Dollar Amount:	$                   74,000
	Account:	Paid - in - Capital	Dollar Amount:	$                   74,000
	Account:	Leave blank	Dollar Amount:	Leave blank
	Account:	Leave blank	Dollar Amount:	Leave blank
	Account:	Leave blank	Dollar Amount:	Leave blank
	Workings:
		Cash	=	($20000 X 3) + $14000
			=	$                   74,000
		Paid - in - Capital	=	($20000 X 3) + $14000
			=	$                   74,000