question archive Part 1) Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity
Part 1) Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity
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Part 1) Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity.
1. Issue $80,000 in stock
2. Borrow $65,000 from a bank
3. Receive payment of $12,000 owed by a customer
4. Pay $6,000 owed to a supplier
What is the net change in Total Assets?
Part 2)
Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity.
1. Purchase equipment for $43,000 in cash
2. Receive payment of $11,000 owed by a customer
3. Buy $14,000 worth of manufacturing supplies on credit
4. Issue $70,000 in stock
5. Pay $8,000 owed to a supplier
6. Borrow $55,000 from a bank
7. Buy $17,000 worth of manufacturing supplies on credit
What is the net change in Total Equity?
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Answer:
Part 1
1) Addition to asset and addition to equity
2)Addition to asset (cash) and addition to liability
3) Addition to asset (cash )and deduction to asset (receivable)
4) Deduction to asset (cash) and deduction to liability
Net change in total assets is addition of 139,000
Part 2
1)Addition to asset (equipment) and deduction to asset (cash)
2) Addition to asset (cash) and deduction to asset (receivable)
3) Addition to asset and addition to liability
4) Addition to asset and addition to equity
5) Deduction to asset and deduction to liability
6) Addition to asset and addition to liability
7) Addition to asset and addition to liability
Net change in total assets is 148,000
