1. For each transaction below, indicate how the transaction affects the accounting equation (Assets = Liabilities + Owners' Equity) by listing which accounts were affected (e.g., Cash, Accounts Payable, etc.), whether the account increased or decreased, and whether that account was tied to Assets, Liabilities, or Owners' Equity. Make sure that the accounting equation still
1. For each transaction below, indicate how the transaction affects the accounting equation (Assets = Liabilities + Owners' Equity) by listing which accounts were affected (e.g., Cash, Accounts Payable, etc.), whether the account increased or decreased, and whether that account was tied to Assets, Liabilities, or Owners' Equity. Make sure that the accounting equation still
Financial Accounting Intro Concepts Meth/Uses
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Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing
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Problem 8Q
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please do exmaple and transactions as that is part of question 1. thanks
![1. For each transaction below, indicate how the transaction affects the accounting equation
(Assets = Liabilities + Owners' Equity) by listing which accounts were affected (e.g., Cash,
Accounts Payable, etc.), whether the account increased or decreased, and whether that account
was tied to Assets, Liabilities, or Owners' Equity. Make sure that the accounting equation still
balances.
Examples:
Example 1: Purchased a building for $1,000,000 in cash
Example 2: Issued shares of common stock to investors in exchange for $100,000 cash
Effect on Accounting Equation: Cash (Assets) ↑ $100,000, Common Stock (Equity) ↑ $100,000
Liabilities +
Owners' Equity
Example 1
Example 2
Transactions:
a
с
e
f
8.0
g
Assets=
Building ↑ $1,000,000
Cash $1,000,000
Cash ↑ $100,000
Assets=
a. Repaid loan of $20,000
b. Purchased $4,000 of inventory on account
c. Received $15,000 in cash from clients for consulting services performed
d. Purchased equipment by taking out a loan with the bank for $500,000
e. Sold inventory that cost $3,000 to customers for $5,000 on account.
f. Paid dividend of $50,000 to investors
g. Paid rent of $4,000 for the current month
Common Stock ↑ $100,000
Liabilities +
Owners' Equity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8b8bfa2c-ac8d-4d51-897a-8cbd81304d07%2F82facc74-992a-4884-b1d4-0d2cac4010b2%2Fcvsrgq_processed.png&w=3840&q=75)
Transcribed Image Text:1. For each transaction below, indicate how the transaction affects the accounting equation
(Assets = Liabilities + Owners' Equity) by listing which accounts were affected (e.g., Cash,
Accounts Payable, etc.), whether the account increased or decreased, and whether that account
was tied to Assets, Liabilities, or Owners' Equity. Make sure that the accounting equation still
balances.
Examples:
Example 1: Purchased a building for $1,000,000 in cash
Example 2: Issued shares of common stock to investors in exchange for $100,000 cash
Effect on Accounting Equation: Cash (Assets) ↑ $100,000, Common Stock (Equity) ↑ $100,000
Liabilities +
Owners' Equity
Example 1
Example 2
Transactions:
a
с
e
f
8.0
g
Assets=
Building ↑ $1,000,000
Cash $1,000,000
Cash ↑ $100,000
Assets=
a. Repaid loan of $20,000
b. Purchased $4,000 of inventory on account
c. Received $15,000 in cash from clients for consulting services performed
d. Purchased equipment by taking out a loan with the bank for $500,000
e. Sold inventory that cost $3,000 to customers for $5,000 on account.
f. Paid dividend of $50,000 to investors
g. Paid rent of $4,000 for the current month
Common Stock ↑ $100,000
Liabilities +
Owners' Equity
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