Selected Transactions for Givens Lawn Services Are Listed Below

question 92

Essay

Selected transactions for Givens Lawn Services are listed below:
1. Purchased a new lawn mower for $2,000, making a 10% down payment in cash, the remainder is on account.
2. Purchased $350 supplies for cash.
3. Billed customers $1,500 for lawn services completed.
4. Purchased used truck for $6,500, fully financed by a bank loan.
5. Collected $800 from customers for services previously billed.
6. Paid balance owing on lawn mower.
7. Incurred telephone expenses of $85 on account.
8. Completed services for customers who pay $440 cash.
9. William Givens, the owner, invests $7,000 of additional funds in the business.
10. Part of the funds invested is used to repay the full balance of the bank loan plus $65 in interest expense.
11. $1,250 in wages is paid to employees.
12. William withdrew $1,000 cash for personal use.
Instructions
For each transaction, state whether the transaction increases or decreases assets, liabilities and/or owner's equity, and by what amount(s).

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Definitions:

Fixed Cost

A cost that does not change with the increase or decrease in the amount of goods or services produced, such as rent, salaries, and insurance.

Planning Budget

A financial plan that estimates income, expenses, and resources over a period, often used for guiding management decisions.

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Fixed Cost

Costs that do not change with the level of production or business activity, such as rent, salaries, and insurance.