Question

The Lerxst Company records these journal entries: Depreciation $75 Accrued Expense $18 Earned portion of Unearned...

The Lerxst Company records these journal entries:

Depreciation

$75

Accrued Expense

$18

Earned portion of Unearned Revenue

$95
Dividends declared but not paid $25

Indicate the net effect of these journal entries on the following items. Indicate the dollar amount of the effect and the direction of the effect. (Example: $13 Increase, or $8 Decrease, or No Effect.)

  1. Net Income
  2. Total Assets
  3. Total Liabilities
  4. Retained Earnings
  5. Total Equity
  6. Working Capital
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Answer #1
Net Income Total Total Retained Total Working
Assets Liabilities earnings Equity Capital
1. Depreciation $75 Decrease $ 75 Decrease No effect $75 decrease $75 Decrease No effect
2. Accrued expense $ 18 Decrease No effect $18 Increase $ 18 Decrease $ 18 Decrease $ 18 Decrease
3. Earned portion of unearned revenue $95 Increase No effect $95 decrease $95 Increase $95 Increase $95 Increase
4. Dividend declared not paid No effect No effect $25 increase $25 decrease $25 decrease $25 decrease
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