The accounting records of Cary's Magic Shows reflect the following account balances at January 1:
$\begin{array}{lllr}
\text { Cash } & \$ 200,000 & \text { Supplies } & \$ 14,000 \
\text { Common Shares } & \$ 100,000 & \text { Retained Earnings } & \$ 114,000
\end{array}$
During the current year,the following transactions occurred:
1. On February 1, the company rented a small office for a one-year period of time. Paid $ \$ 12,000 $ cash.
2. On November 1 , the company received $ \$ 3,600 $ cash for magic lessons to be provided evenly over November, December, and January.
3. By December 31 , the company had used $ \$ 6,000 $ of the supplies.
4. At December 31 , the company accrued $ \$ 5,000 $ in wages and salaries.
5. During the year, the company paid cash for $ \$ 25,000 $ in wages and salaries.
6. During the year, the company earned $ \$ 65,000 $ cash in magic lesson revenue.
Required:
A) Determine the effect on financial statement accounts of the preceding transactions. Hint: It may be helpful to create a table to reflect the increases and decreases in account.

Question

The accounting records of Cary's Magic Shows reflect the following account balances at January 1:
 $\begin{array}{lllr}
\text { Cash } & \$ 200,000 & \text { Supplies } & \$ 14,000 \
\text { Common Shares } & \$ 100,000 & \text { Retained Earnings } & \$ 114,000
\end{array}$ 
During the current year,the following transactions occurred:
 1. On February 1, the company rented a small office for a one-year period of time. Paid $ \$ 12,000 $ cash.
2. On November 1 , the company received $ \$ 3,600 $ cash for magic lessons to be provided evenly over November, December, and January.
3. By December 31 , the company had used $ \$ 6,000 $ of the supplies.
4. At December 31 , the company accrued $ \$ 5,000 $ in wages and salaries.
5. During the year, the company paid cash for $ \$ 25,000 $ in wages and salaries.
6. During the year, the company earned $ \$ 65,000 $ cash in magic lesson revenue. 
Required:
 A) Determine the effect on financial statement accounts of the preceding transactions. Hint: It may be helpful to create a table to reflect the increases and decreases in account.

Quizplus · Accepted Answer

The Answer of The accounting records of Cary's Magic Shows reflect the following account balances at January 1:
 $\begin{array}{lllr}
\text { Cash } & \$ 200,000 & \text { Supplies } & \$ 14,000 \
\text { Common Shares } & \$ 100,000 & \text { Retained Earnings } & \$ 114,000
\end{array}$ 
During the current year,the following transactions occurred:
 1. On February 1, the company rented a small office for a one-year period of time. Paid $ \$ 12,000 $ cash.
2. On November 1 , the company received $ \$ 3,600 $ cash for magic lessons to be provided evenly over November, December, and January.
3. By December 31 , the company had used $ \$ 6,000 $ of the supplies.
4. At December 31 , the company accrued $ \$ 5,000 $ in wages and salaries.
5. During the year, the company paid cash for $ \$ 25,000 $ in wages and salaries.
6. During the year, the company earned $ \$ 65,000 $ cash in magic lesson revenue. 
Required:
 A) Determine the effect on financial statement accounts of the preceding transactions. Hint: It may be helpful to create a table to reflect the increases and decreases in account.

The Accounting Records of Cary's Magic Shows Reflect the Following