E2-4 (Algo) Determining Financial Statement Effects of Several Transactions L The following events occurred for Favata Company a. Received $20,000 cash from owners and issued stock to them. b. Borrowed $17,000 cash from a bank and signed a note due later this year c. Bought and received $1,800 of equipment on account. d. Purchased land for $32.000; paid $3,000 in cash and signed a long-term note for $29,000. e Purchased $13,000 of equipment; paid $3,000 in cash and charged the rest on account. Required: For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect on the
E2-4 (Algo) Determining Financial Statement Effects of Several Transactions L The following events occurred for Favata Company a. Received $20,000 cash from owners and issued stock to them. b. Borrowed $17,000 cash from a bank and signed a note due later this year c. Bought and received $1,800 of equipment on account. d. Purchased land for $32.000; paid $3,000 in cash and signed a long-term note for $29,000. e Purchased $13,000 of equipment; paid $3,000 in cash and charged the rest on account. Required: For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect on the
Chapter1: Financial Statements And Business Decisions
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E2-4 (Algo) Determining Financial Statement Effects of Several Transactions [LO 2-1, LO 2-2]
The following events occurred for Favata Company:
a. Received $20,000 cash from owners and issued stock to them.
b. Borrowed $17,000 cash from a bank and signed a note due later this year.
c. Bought and received $1,800 of equipment on account.
d. Purchased land for $32,000; paid $3,000 in cash and signed a long-term note for $29,000.
e Purchased $13,000 of equipment; paid $3,000 in cash and charged the rest on account.
Required:
For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect on the
accounting equation. (Enter any decreases to account balances with a minus sign.)
Event
a
D
0
d
d
.
Assets
Liabilities
Accounts Payable
Accounts Receivable
Accumulated Amortization
Accumulated Depreciation
Stockholders' Equity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0507d977-40c4-415e-96d7-be834965d5c0%2Fe4d59e2b-c076-4246-841a-d33c293e14fa%2Fol8kcz_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A
E2-4 (Algo) Determining Financial Statement Effects of Several Transactions [LO 2-1, LO 2-2]
The following events occurred for Favata Company:
a. Received $20,000 cash from owners and issued stock to them.
b. Borrowed $17,000 cash from a bank and signed a note due later this year.
c. Bought and received $1,800 of equipment on account.
d. Purchased land for $32,000; paid $3,000 in cash and signed a long-term note for $29,000.
e Purchased $13,000 of equipment; paid $3,000 in cash and charged the rest on account.
Required:
For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect on the
accounting equation. (Enter any decreases to account balances with a minus sign.)
Event
a
D
0
d
d
.
Assets
Liabilities
Accounts Payable
Accounts Receivable
Accumulated Amortization
Accumulated Depreciation
Stockholders' Equity
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