Concept explainers
Problem 1-1B Identifying effects of transactions on financial statements A1 P1
Identify how each of the following separate transactions 1 through 10 affects financial statements. For increases, place a “+” and the dollar amount in the column or columns. For decreases, place a "-" and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (-) along with dollar amounts. The first transaction is completed as an example.
Required
a. For the
b. For the statement of
a. | b. | |
Income | ||
Balance Sheet | Statement | Statement of Cash Flows |
Transaction | TotalAssets | Total Liab. | Total Equity | NetIncome | Operating Activities | Investing Activities | Financing Activities | |
1 | Owner invests $800 cash in business | +800 | +800 | +800 | ||||
2 | Purchases $100 of supplies on credit | |||||||
3 | Buys equipment for $400 cash | |||||||
4 | Provides services for $900 cash | |||||||
5 | Pays $400 cash for rent incurred | |||||||
6 | Buys $200 of equipment or credit | |||||||
7 | Pays $300 cash for wages incurred | |||||||
8 | Owner withdraws $50 cash | |||||||
Provides $600 services on credit | ||||||||
10 | Collects $600 cash on |
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FUNDAMENTAL ACCOUNTING PRINCIPLES
- Identify how each of the following separate transactions through 10 affects financial statements. For increases, place a "+" and the dollar amount in the column or columns. For decreases, place a "-" and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (-) along with dollar amounts. The first transaction is completed as an example. Required a. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total cq- A1 P1 uity. For the income statement, identify how each transaction affects net income. b. For the statement of cash flows, identify how each transaction affects cash flows from operating ac- tivities, cash flows from investing activities, and cash flows from financing activities. 2 3 4 5 6 7 8 9 10 Transaction Owner invests $800 cash in business in exchange for stock Purchases $100 of supplies on credit Buys equipment for $400 cash Provides services for $900 cash Pays $400 cash for rent…arrow_forwardIdentify how each of the following separate transactions 1 through 10 affects financial statements. For increases, place a “+” and the dollar amount in the column or columns. For decreases, place a “−” and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (−) along with dollar amounts. The first transaction is completed as an example.arrow_forward15 Which account would be increased with a debit? Multiple Choice Supplies Accounts Payable Common Stock Retained Earningsarrow_forward
- 14. Applying the concept of double- entry accounting system, which of the following refers to term "debit"? O A. Increase B. Decrease O C. Left side O D. Right sidearrow_forwardUse the following to answer questions 16 - 19 For each transaction indicate whether it should: A. increase, B. decrease, or C. no effect. Credit sales transaction cycle Assets Liabilities Stockholders' equity Revenues Expenses 16. Provide services on account 17. Estimate uncollectible accounts 18. Write off accounts as uncollectible 19. Collect on account previously written offarrow_forwardJOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19arrow_forward
- D Question 2 In a tabular analysis each row must balance mathematically. the columns should be totaled first. the cash column entries should be labeled by name (e.g Payroll). each row must balance in the number of column entries.arrow_forwardIndicate what impact ( for increase; for decrease) the following transactions would have on the accounting equation, . Table 3.17arrow_forwardIdentify whether each of the following transactions would be recorded with a debit (Dr) or credit (Cr) entry. Table 3.7arrow_forward
- Identify the correct pair of formula from the following column I and II: (Choose the correct alternative) Column I Column II A Current Account Surplus i. Receipts Payments C Balance Current Account i. Receipts + Payments D Current Account Deficit iv. Receipts < Payments Alternatives: а) А -i b) В - ii c) C - ii d) D - ivarrow_forwardExercise 11-7 (Static) Effect of transactions on various financial ratios Indicate the effect that each transaction/event listed here will have on the financial ratio listed opposite it. Use + for increase, – for decrease, and (NE) for no effect. Assume that current assets exceed current liabilities in all cases, both before and after the transaction/event. Transaction/Event Financial Ratio Effect a. Split the common stock 2 for 1. b. Collected accounts receivable. c. Issued common stock for cash. d. Sold treasury stock. e. Accrued interest on a note receivable. f. Sold inventory on account. g. Wrote off an uncollectible account. h. Declared a cash dividend. i. Incurred operating expenses. j. Sold equipment at a loss. Book value per share of common stock Number of days' sales in accounts receivable Total asset turnover Return on equity Current ratio Acid-test ratio Accounts receivable turnover Dividend yield Margin NE Earnings per sharearrow_forwardWhat is the EFFECT on accounting equation for the transaction "Commission Received OMR 100"? a. Decrease Cash, Decrease Commission O b. Increase Creditor, Increase Commission O c. Increase Cash, Increase Commission O d. Decrease Cash, Increase Commissionarrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College