Keystone Computer Timeshare Company entered into the following transactions during May 2017. Describe the effect of each transaction on assets, liabilities, and stockholders' equity. 1. Purchased computers for $20,000 from Data Equipment on account. 2. Paid $3,000 cash for May rent on storage space. 3. Received $15,000 cash from customers for contracts billed in April. 4. Performed computer services for Ryan Construction Company for $2,700 cash. 5. Paid Midland Power Co. $11,000 cash for energy usage in May. 6. Stockholders invested an additional $32,000 in the business. 7. Paid Data Equipment for the computers purchased in (1) above. 8. Incurred advertising expense for May of $840 on account.

The change in each transaction is indicated by the bold letter. Also the numerical value has benn added or subtracted. At each transaction the total of the assets and the total of the liabilities and Owner's equity remains the same.

Explanation:

Keystone Computer Timeshare Company

    Assets           =       Liabilities +           Owner's Equity

1. + Computers =       + Accounts Payable

 +$20,000=  +$20,000  + Owner's Equity

2. -Cash   + Computers = + Accounts Payable  + Owner's Equity- Expense

-3000 + 20,000= + 20,000 + OE - 3000

3. + Cash + Computers- Accounts Receivable  = + Accounts Payable  + Owner's Equity- Expense

12,000 + 20,000 - (15000) = + 20,000 + OE - 3000

4. + Cash + Computers- Accounts Receivable  = + Accounts Payable  + Owner's Equity- Expense+ revenue

12,000+2700 + 20,000 - (15000) = + 20,000 + OE - 3000+ 2700

5. - Cash + Computers- Accounts Receivable  = + Accounts Payable  + Owner's Equity- Expense+ revenue

1,000+2700 + 20,000 - (15000) = + 20,000 + OE - 3000+ 2700- 11000

6.  + Cash + Computers- Accounts Receivable  = + Accounts Payable  + Owner's Equity- Expense+ revenue

33000+2700 + 20,000 - (15000) = + 20,000 + 32000 - 14000+ 2700

7. -Cash + Computers- Accounts Receivable  = - Accounts Payable + Owner's Equity- Expense+ revenue

13000+2700 + 20,000 - (15000) =  32000 - 14000+ 2700

8. Cash + Computers- Accounts Receivable  = +Accounts Payable Owner's Equity- Expense+ revenue

13000+2700 + 20,000 - (15000) =  840 +32000 - 14000+ 2700- 840

13000+2700 + 20,000 - (15000) =840 + 19,860

Assets           =       Liabilities +           Owner's Equity

20,700          =                 840 + 19,860                  

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.