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E2-4 (Algo) Determining Financial Statement Effects of Several Transactions LO2-3 The following events occurred for Johnson Company: a. Received investment of cash by organizers and distributed to them 1,070 shares of $1 par value common stock with a market price of $5 per share. b. Purchased $8,200 of equipment, paying $1,800 in cash and owing the rest on accounts payable to the manufacturer. c. Borrowed $5,000 cash from a bank. d. Loaned $600 to an employee who signed a note. e. Purchased $24,767 of land; paid $10,000 in cash and signed a note for the balance. Required: For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. (If no impact on accounting equation leave cells blank.) Event Assets Liabilities Stockholders' Equity a. b. C. d. e.

E2-4 (Algo) Determining Financial Statement Effects of Several Transactions LO2-3 The following events occurred for Johnson Company: a. Received investment of cash by organizers and distributed to them 1,070 shares of $1 par value common stock with a market price of $5 per share. b. Purchased $8,200 of equipment, paying $1,800 in cash and owing the rest on accounts payable to the manufacturer. c. Borrowed $5,000 cash from a bank. d. Loaned $600 to an employee who signed a note. e. Purchased $24,767 of land; paid $10,000 in cash and signed a note for the balance. Required: For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. (If no impact on accounting equation leave cells blank.) Event Assets Liabilities Stockholders' Equity a. b. C. d. e.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**E2-4 (Algo) Determining Financial Statement Effects of Several Transactions LO2-3** The following events occurred for Johnson Company: a. Received investment of cash by organizers and distributed to them 1,070 shares of $1 par value common stock with a market price of $5 per share. b. Purchased $8,200 of equipment, paying $1,800 in cash and owing the rest on accounts payable to the manufacturer. c. Borrowed $5,000 cash from a bank. d. Loaned $600 to an employee who signed a note. e. Purchased $24,767 of land; paid $10,000 in cash and signed a note for the balance. **Required:** For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and - for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. **(If no impact on accounting equation leave cells blank.)** | Event | Assets | = | Liabilities | + | Stockholders’ Equity | |-------|--------|---|-------------|---|----------------------| | a. | | | | | | | b. | | | | | | | c. | | | | | | | d. | | | | | | | e. | | | | | | Remember to fill in each row with the appropriate changes to the assets, liabilities, and stockholders' equity based on the described transactions. For instance, in case (a), the company receives cash, impacting assets, and issues common stock, impacting stockholders' equity.
Transcribed Image Text:**E2-4 (Algo) Determining Financial Statement Effects of Several Transactions LO2-3** The following events occurred for Johnson Company: a. Received investment of cash by organizers and distributed to them 1,070 shares of $1 par value common stock with a market price of $5 per share. b. Purchased $8,200 of equipment, paying $1,800 in cash and owing the rest on accounts payable to the manufacturer. c. Borrowed $5,000 cash from a bank. d. Loaned $600 to an employee who signed a note. e. Purchased $24,767 of land; paid $10,000 in cash and signed a note for the balance. **Required:** For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and - for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. **(If no impact on accounting equation leave cells blank.)** | Event | Assets | = | Liabilities | + | Stockholders’ Equity | |-------|--------|---|-------------|---|----------------------| | a. | | | | | | | b. | | | | | | | c. | | | | | | | d. | | | | | | | e. | | | | | | Remember to fill in each row with the appropriate changes to the assets, liabilities, and stockholders' equity based on the described transactions. For instance, in case (a), the company receives cash, impacting assets, and issues common stock, impacting stockholders' equity.
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