Satka Fishing Expeditions, Inc., recorded the following transactions in July 1. Provided an ocean fishing expedition for a credit customer, payment is due August 10
2. Paid Marine Service Center for repairs to boats performed in June. (In June, Satka Fishing Expeditions, Inc., had received and properly recorded the invoice for these repairs.)
3. Collected the full amount due from a credit customer for a fishing expedition provided in June.
4. Recelved a bill from Baldy's Bait Shop for bait purchased and used in July. Payment is due August 3
5. Purchased a new fishing boat on July 28, paying part cash and issuing a note payable for the balance. The new boat is first scheduled for use on August 5
6. Declared and paid a cash dividend on July 31
Indicate the effects that each of these transactions will have upon the following six total amounts in the company's financial statements for the month of July.
Choose I for increase, D for decrease, and NE for no effect in the column headings below to show the effects of the above transactions.

Satka Fishing Expeditions, Inc.

Indication of the effects that each of these transactions will have upon the following six total amounts in the company's financial statements for the month of July:

Transaction             Income Statement                       Balance Sheet

                 Revenue  - Expenses = Net Income  Assets = Liabilities + Equity

1.                    I                    NE               I                   I                                 I

Accounts Receivable and Sales Revenue

2.                  NE                 NE               NE              D                  D          NE                      

Accounts Payable and Cash

3.                  NE                 NE               NE              NE (I and D)  NE      NE

Cash and Accounts Receivable

4.                 NE                  I                  D                NE                 I            D

Supplies Expenses and Accounts Payable

5.                 NE                 NE               NE              I/D                I            NE

Boat Purchased, Cash and Note Payable  

6.                 NE                NE                D              NE                 NE         D

Retained Earnings and Cash

Explanation:

a) Data and Transaction Analysis:

1. Accounts Receivable and Sales Revenue

2. Accounts Payable and Cash

3. Cash and Accounts Receivable

4. Supplies Expenses and Accounts Payable

5. Boat Purchased, Cash and Note Payable  

6. Retained Earnings and Cash

b)

Key:

I = increase

D = decrease

NE = no effect

No. 3 will increase the assets (cash) by the amount and decrease the assets (accounts receivable) by the same amount.  Overall, there will be no effect as the increase cancels the decrease equally.

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