Problem:
For each of the following transactions, indicate by what amount each of these types of measurements would be affected. Use parentheses to indicate that an event would cause a decrease. If an event does NOT involve an operating activity, place a zero in the spaces provided. The time period covered is the current month.
Operating Activity
Cash Basis Accrual Basis
A) Inventory for resale was purchased for $12,000 cash
B) Equipment was purchased for $2,500 cash
C) Rent of $2,000 was paid, $1,000 for the current month and $1,000 for the next month
D) Inventory that cost $2,700 was sold for $5,000 cash
E) Depreciation of $150 was recorded